Daily View: Iceland's bank repayments
Iceland's president has refused to sign a controversial bill to repay $5bn (£3.1bn) to the UK and the Netherlands instead vowing to hold a referendum on the bill. Commentators consider what should happen next.
why the Icelandic public feel angry:
"What people in the UK might not understand is that Icelanders feel betrayed by the UK government. When the Icelandic banks ran into trouble in late 2008 the Labour government added insult to injury by invoking the UK anti-terrorist act, freezing all Icelandic assets in the UK - which ultimately drove the banks into the ground. Icelanders therefore find the idea that they should foot the whole bill alone difficult to swallow."
sympathy for people in Iceland:
"The overall amount involved might not seem excessive - around £3.5bn - but only 300,000 people live in Iceland, so that equates to about £40,000 per family. The annual interest alone, if adjusted for population size, would be the equivalent of the UK paying over £40bn a year, almost half the cost of the NHS."
about what may happen if the referendum decides against current repayment plans:
"This extraordinary development jeopardizes stricken Iceland's attempts to join the EU, which wants the money paid to the U.K. and the Netherlands. Here one suspects that the Icelanders are about to find out how the EU works. If they dare vote no in the referendum, they can always be asked to vote again, and again and again. Until they get the right answer."
the referendum would be meaningless:
"But whatever the outcome of the referendum, they will have to pay. An earlier version of the law, passed last August, commits the country to starting repayments in 2016. Back in the boom years, banks liked to boast that they were too big to fail. Iceland's bad luck is to be small and weak, and to have failed spectacularly. The world can insist on getting its cash back."
that the UK government made the debt more than legally necessary:
"Britain's decision to seize the UK assets of Icelandic banks then compensate all UK depositors in full was one taken entirely of its own volition - it was part of Britain's general response to the banking crisis, when it was thought important to confidence in the banking system that nobody should lose any money. All the same, it is also the case that when push comes to shove, national governments should stand behind the international liabilities of their home grown banks."
confronting Iceland's central bank governor, David Oddsson, about the ethics of attracting UK savers to Iceland two years ago:
"Icelandic banks had been a no-go area for international investors for some time. Yet they raised huge sums, more cheaply, from unsophisticated investors in Britain."
about the UK government's approach to the situation:
"Whatever the rights and wrongs, Iceland was by then already being crushed by a financial tsunami. Britain's use of anti-terror laws at that moment will not sit pretty in diplomatic history."
the actions despite risking Iceland's credit rating:
"The irony in this mess is that Fitch [credit rating agency] immediately downgraded Iceland. Heck, the way I see it Iceland ought to be upgraded. With a debt overhand from the IMF, Iceland would have had a default looming over its head for a decade with it citizens struggling under a burden of that debt for a decade or longer."
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