Icelanders vote ‘No’ payback for bank failure

Faced with a referendum to approve a deal that would have cost every person in Iceland a quarter of their income for the next eight years, 63 percent of Iceland’s registered voters ignored the light snow and came out to massively reject the deal. With almost all the ballots counted, 94 percent were “no,” with spoiled and blank votes outnumbering the 2 percent who voted “yes.”

In January, Iceland President Olafur R. Grimsson vetoed a bill that would have had Icelanders repay $3.5 billion to Britain and $1.8 billion to the Netherlands. This veto automatically set up this referendum. In 2008, a private Icelandic bank named IceSave failed. People in the two countries were holding 350,000 accounts in IceSave. The two governments subsidized the losses of British and Dutch account holders.

But the British government has tried to force Iceland to pay this money back. It even applied its anti-terrorism laws against Iceland — whose governments have all been loyal to NATO — to freeze the assets of all Icelandic banks in the country.

This wasn’t the first time British imperialism tried to bully Iceland. In the 1970s, when Iceland imposed a 200-mile limit on its fishing waters, Britain sent warships to ram the Icelandic Coast Guard vessels enforcing the limit. (“Ring of Seasons: Iceland — Its Culture and History,” p. 246).

Iceland is a small island nation of only 320,000 people located just south of the Arctic Circle in the North Atlantic and is still underdeveloped. Fishing, some aluminum processing and tourism are its main economic activities.

Iceland’s banks collapsed as part of the 2008 financial crisis. Its economy managed to stay afloat with a loan from the Nordic countries and the International Monetary Fund, but if the dispute with Great Britain and the Netherlands is not resolved, these loans might be frozen, which would be a major economic blow.

Demonstrators wielding fireworks and whistles took to the streets of Reykjavik on March 6. Signs read, “Power to the People” and “No Deal.” “We are not going to pay the debts for those bankers,” demonstrator Svenbjorn Arnason told National Public Radio. “They have given their debts to us, the people of Iceland.”