Iceslave Bill

Mordant nickname for the proposed $5 billion “Icesave Bill” – legislation that would commit Iceland to compensating the UK and the Netherlands for the banking failures of 2008.

Iceland’s President Olafur Grimsson has forced a national referendum on the $5 billion Icesave Bill, EurActiv and Reuters reported.

British and Dutch depositors in high-interest Icesave bank accounts lost their money when Iceland’s banks collapsed in 2008 after years of aggressive expansion fuelled by debt. The two countries compensated savers in full and want their money back.

If voters reject the bill, the law reverts to an earlier version passed in August. Britain and the Netherlands rejected those terms because repayments were not guaranteed after 2024.

Many Icelanders oppose giving an open-ended state guarantee, believing they have been saddled unfairly with crippling debts to pay for the mistakes of their banks. …

A failure to back the measure – which some on the island have dubbed the “Iceslave bill” – could prolong economic misery and have wider repercussions.

Financial aid to Iceland, which is still mired in a deep recession, is dependent on an agreement with Britain and the Netherlands. The success (or failure) of the Icesave Bill could also influence Iceland’s bid to join the European Union, and its reputation among the global community.