New Icesave deal rejected in Icelandic referendum

08:48, April 11, 2011      

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Icelandic voters in a referendum on Saturday rejected a new Icesave deal on the repayment of the billions of U.S. dollars by Iceland to the UK and the Netherlands, which were used to bail out the Icesave savings account holders in the branches of a failed Icelandic bank in 2008.

According to preliminary results published on Sunday morning, five of the six constituencies in Iceland had completed vote counting. Among the five constituencies, the number of "yes" votes are all well below the benchmark of 51 percent to get the deal accepted.

The Icelandic broadcasting service RUV reported that almost 60 percent of Icelanders voted no in the referendum and the turn-out was over 60 percent.

In Reykjavik North, 73.2 percent of voters participated in the referendum, with 46.7 percent of participants saying "yes" and 53.3 percent saying "no." In Reykjavik South, the turn-out was 75.3 percent, "yes" votes were 45.7 percent and "no" votes were 54.3 percent.

In the Southwest constituency, 77.8 percent of voters turned up at the poll stations, 41.6 of them voted for and 58.4 percent against the so-called Icesave deal. While in the South constituency, the turn-out was 75.5 percent, with "yes" votes accounting for only 27.1 percent and "no" votes 72.9 percent. In the Northeast constituency, the turn-out was 73.2 percent, with 37.8 percent voting yes and 62.2 percent voting no.

In the Northwest constituency where the counting was yet to be finished, among the 10,500 votes counted, 37.4 percent said "yes" and 62.6 percent said "no."

This was the second referendum Iceland held on the Icesave issue. In March 2010, a deal on the issue was turned down by 93 percent of voters, who took part in the first referendum.

Many Icelandic people said they believe it is unfair for them and the future generations to pay for what they are not responsible for.

The number of "yes" votes increased substantially due to government-organized campaigns before the the referendum.

But the repeated rejection by Icelandic people to repay the "debt" was feared to have a negative impact on the economic recovery in Iceland.

Tryggvi Passol, director of financial stability in the central bank of Iceland, told Xinhua on Saturday that a "no" result might mean the ratings of Iceland would deteriorate, which in turn will make it more difficult for Iceland to raise much-needed capital in international markets.

In 2008, 400,000 depositors in UK and the Netherlands, who were holding the Icesave online savings accounts in the branches of Landsbanki, lost their money when the then second largest bank of Iceland collapsed and the authorities in the two countries moved in with a bail-out effort, which cost 5.3 billion U.S. dollars and subsequently has been demanding reimbursement from Iceland.

Source: Xinhua
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