Icelanders voted in a referendum on Saturday on a $5 billion deal to repay Anglo-Dutch loans, with an expected resounding "No" set to further delay foreign aid and hopes for economic recovery. Despite the consequences of rejecting the standing deal, Icelanders are set to do just that, angry about what they see as harsh repayment terms from Britain and the Netherlands and they are now certain they can get a much better deal.
Voting began at 0900 GMT and first partial results are expected shortly after polls close at 2200 GMT. "We want to pay our debts, but we want to do it without going bankrupt," said Steinunn Ragnarsdottir, a pianist who voted in Reykjavik City Hall with her two-year-old daughter.
Albert Olafsson, an auditor, said: "It is not fair that Icelandic taxpayers take all the blame for private bankers. This deal is simply not realistic and we can get a better one." No political parties are backing the "Iceave" accord agreed in late 2009, not even Prime Minister Johanna Sigurdardottir who brokered the deal. She has vowed to stay on after the referendum and said she would not cast a vote in the ballot.
The Icesave debt amounts to more than $15,000 for every one of Iceland's 320,000 people, though most of the money is likely to be raised eventually by the sale of assets of Landsbanki, which operated "Icesave" accounts before folding late in 2008.
Britain and the Netherlands have offered easier terms, so there is no reason for voters to back the old deal. Iceland's Finance Minister Steingrimur Sigfusson said the expected results of the referendum should not be interpreted as Iceland refusing to pay its "Icesave" obligations.
"We will honour our obligations. To maintain anything else is highly dangerous for the economy of this country," he said. The foreign minister told Reuters on Friday that he expected a new deal "in the next weeks, perhaps sooner", which would limit the economic impact of the ballot.