Iceland says no

By Felix Salmon
March 6, 2010
98% no vote -- especially when it's a referendum on a bill which was passed by a democratically-elected legislature? The first reaction is that the people have obviously spoken with one voice. But then the question arises: What have they said?

" data-share-img="" data-share="twitter,facebook,linkedin,reddit,google" data-share-count="true">

Does any referendum, ever, get a 98% no vote — especially when it’s a referendum on a bill which was passed by a democratically-elected legislature? The first reaction is that the people have obviously spoken with one voice. But then the question arises: What have they said?

It’s worth noting, here, that the bill they were voting on — that Iceland repay its $5.3 billion debt over 15 years, with 5.5% interest — is no longer the deal being offered by the UK and Holland, which have now offered a two-year interest holiday and a lower interest rate. And it’s also worth noting that the “no” vote was certainly split between people saying “no to this deal” and people saying “no to any deal”.

So maybe this is simply a sensible national negotiating tactic, giving Iceland some small amount of leverage in the run-up to a new deal being hammered out in coming weeks.

Or maybe it’s just in the national character to want to stand up to bullies.

More From Felix Salmon
Post Felix
The Piketty pessimist
The most expensive lottery ticket in the world
The problems of HFT, Joe Stiglitz edition
Private equity math, Nuveen edition
Five explanations for Greece’s bond yield
Comments
3 comments so far

I’m having a cod wars déjà vu moment here.

Posted by Zardoz | Report as abusive

The danger of turning down this deal is that IMF witch doctors may stop offering Iceland their medicine of bleedings and leeches… wait a minute, that’s a problem?!

Posted by johnhhaskell | Report as abusive

Felix, you could report that Iceland is, in fact, keeping its treaty obligations with the EU. This “deal” is nothing more than the UK whining about how they deserve special treatment. Make no mistake about it: The EU proscribes an FDIC-style of protection for individual accounts.. up to a certain value, and over that everything’s gone. The “deal” described in your article is only sent to the Iceland citizenry because the UK is demanding that Iceland guarantee ONE HUNDRED PERCENT of deposits.

The blame lies with the UK’s politicians, not with Iceland. This is definitively not “Iceland’s debt” — they never agreed to anything of the sort.

Posted by Unsympathetic | Report as abusive
Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/