Icelanders reject deal to repay British and Dutch

ICELAND: Icelandic voters vented their fury on Saturday at the bankers and politicians who ruined their economy, overwhelmingly rejecting a $5 billion deal to repay debts to Britain and the Netherlands, early results showed.

The outcome of the referendum had not been in doubt since Iceland had recently been offered better repayment terms than those contained in the deal on which residents were voting.

Partial referendum results from around a third of the cast votes showed 93 percent opposed the deal and less than 2 percent supported it. The rest cast invalid votes.

But the rejection will still have major repercussions, keeping financial aid on hold and threatening to undermine the centre-left government of Prime Minister Johanna Sigurdardottir. "This has no impact on the life of the government. We need to keep going and finish the (Icesave) debate. We have to get an agreement," Sigurdardottir told public television. The referendum, Iceland's first since independence from Denmark in 1944, was forced by the refusal of Iceland's president to sign a law in January on repayment terms negotiated by the government and approved by parliament. The Icesave debts come to more than $15,000 for each one of the 320,000 people on the island.

The debts arose after Iceland's top banks all collapsed within days of each other in 2008, brought down when credit dried up in the global financial crunch. Around 400,000 savers in Britain and the Netherlands had deposits with one of the banks in so-called Icesave online deposit accounts.

Reykjavik, Sunday, Reuters