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Should Iceland be forced to repay debts?

08:43 UK time, Saturday, 6 March 2010

People in Iceland have voted against a plan to repay debts to the UK and the Netherlands in the wake of the Icesave collapse. Do you agree with the result?

The British and Dutch governments want reimbursement for the 3.8bn euros (£3.4bn; $5.2bn) they paid out in compensation to customers in 2008. UK Chancellor Alistair Darling told the BBC the money would be repaid, if not for many years.

However, many Icelanders feel they are being penalised for the mistakes of the banking industry.

Are you surprised by the result? Are Icelanders being unfairly penalised for the mistakes of the banking industry? Is holding a referendum a good way to come to a decision? What next for Iceland and its debts after the rejection of the repayment plan?

Q&A: Iceland debt referendum

This debate has now been closed. Thank you for your comments.


Page 1 of 6

  • Comment number 1.

    We ALL want the BANKS brought to task, not the long-suffering peoples of whatever country the banks have stripped.

  • Comment number 2.

    They have given the people a referendum, so ask yourselves how would the people of the UK vote in similar circumstances. Judging by the comments posted on HYS every time taxation is mentioned, the answer would be a resounding 'NO'. The culprits are the Icelandic bankers, so, as here, the people will feel let down by these so called 'masters of the universe' and will not feel that the debt is their responsibility.
    BTW, the UK using anti-terror legislation against Iceland was a disgrace.

  • Comment number 3.

    Icelanders are being unfairly penalised for the mistakes of the bankers. As our we and many other decent citizens the World over. However, as a country, they are in debt to us and must pay this debt back. No referendum should be needed to determine this. They are liable and must meet acceptable terms to clear their debt. How they raise the money is up them and the referendum should focus on that.

  • Comment number 4.

    I don't think the people of Iceland should be forced to pay for the banks mistakes anymore than I think we should have had to. The Banks made billions from playing the 'free' market economy game for years and when they lost they should have payed the consequences. The troubled banks should have been left to collapse as is the correct order of things. Gordon Brown had already promised UK citizens up to £50,000 each to help cover any losses. I'm sure if he had the guts to put the question of borrowing billions to prop up a few bad banks to the British people they too would have said no.

  • Comment number 5.

    We all know any form of investment involves a risk of loosing your money - It is verging on the ridiculous for greedy investors to expect any taxpayer to foot the bill for their personal financial incompetence. If I invest my personal wealth in a business which subsequently failed it is my personal responsibility to suffer the losses incurred by my stupidity. The same principle applies here - Off course the Iceland taxpayer is in NO WAY responsible for the failure of this bank or the losses of its investors. Don't pay won't pay!

    And the use of anti-terror legislation to freeze Iceland's assets provides a glimpse of the perversity of our State and the real 'rational' behind such insidious legislation.

  • Comment number 6.

    If Iceland as a Nation refuses to pay its debts, it will find that it will become a non Nation.

  • Comment number 7.

    If the taxpayers keep rushing in to prop up incompetently-run banks, then we are always going to have incompetently-run banks. Our money shouldn't have been used to prop up our banks. Good on the Icelanders for standing up to their government.

  • Comment number 8.

    We ALL want the BANKS brought to task, not the long-suffering peoples of whatever country the banks have stripped.

    Iceland has enjoyed just about the highest standard of living in the World and has for Years.

    Not a lot of suffering been going on there!

  • Comment number 9.

    'Are Icelanders being unfairly penalised for the mistakes of the banking industry?'
    Yes - those Bankers that caused the problem should pay - not the public. Just like the UK, the public are being forced to pay for the antics of greedy Bankers via their Taxes. It's time to 'weed out' those concerned, and fine them. It is not too hard to find out exactly who they are - the FBI can do it - why can't we?

  • Comment number 10.

    I can understand that the Icelandic people don't think it fair for them to pay, but I'd like to see them have a referundum on who should. Is it the people who held the bank accounts because they "took advantage" of better savings rates? Is it the British tax payer? Ultimately, the bank was regulated under Icelandic law, presumably operating under a license in the UK. For me that makes both sets of regulators jointly responsible. The regulators merely represent the people of the country. If the Icelandic people want to step away when something goes wrong then that's fine. But by extension, I will take no assurance from the fact that a business is registered there. For significant transactions, that is makes a diffence.

  • Comment number 11.

    Are the Icelandic nation so thick that they do not realise that a pendulum swings both ways, and if they take such action not to pay back that pendulum is likely to smack them right in the face.

  • Comment number 12.

    £3.4bn seems a small amount on the scale of things but it equates to over £10,000 for every person in Iceland (equivalent to well over £600bn in UK). I can understand the reluctance to bail out foreign investors and I would probably vote NO if asked a similar question.

  • Comment number 13.

    I think the rules should be just the same, whether dealing with individuals, businesses or governments - if you have incurred debts, then you must repay them or face the consequences. The Iceland Government were happy enough to allow the banks to entice investors, and just because their plan spectacularly failed, there is no justification for them reneging on the deal. They should pay up.

  • Comment number 14.

    After seeing the way the financial gods and true rulers of the world operate I have decided to start up a bank. When I have amassed billions of other peoples money I am going to invest the lot in hard drinking ,partying and gambling. Then when the savers want thier money back I'll just say sorry blew it all on wild living and pass the debt onto the local populace while I slink off to my £5m mansion in some off shore tax haven having commited the biggest con ever. Why are ordinary people being made responsible for the debts of a private company?? I say unless you can find an agreement to repay the banks losses signed by me personally then they can get lost. The true criminals in all this have yet to face any REAL hardship they wont miss a single meal but thousands of innocent DUPED by their own governments will. This is the biggest fnancial scandle ever and NOBODY is prepares to bring the criminals to account!!

  • Comment number 15.

    I guess if we were asked the same here there would be a riot amongst the tax payers ! Actually, tax payers in the UK have bailed out the banks here and we didn't have a choice. Had had we been asked there would have been a resounding " no". But Iceland has enjoyed a very high standard of living and it looks like they will have to suffer like the rest of us. Oh those bankers and the lack of regulations. Why should ordinary folks have to suffer. It is always the way of the world.

  • Comment number 16.

    6. At 10:07am on 06 Mar 2010, barryp wrote:
    If Iceland as a Nation refuses to pay its debts, it will find that it will become a non Nation.

    Why should it? This would be a golden oppertunity for the Icelanders to get rid of the very system that led to the collapse FRACTIONAL RESERVE BANKING! Reclaim their own currency from the banks and put very strict rules in place to monitor the commitments undertaken by themselves .At the very least they would be a DEBT Free nation!!

  • Comment number 17.

    The banking system collapsed, its that simple, so whoever invested their money in Iceland took a measured risk and lost, as for te british Govt bailing Iceland out, and doing them a favour, they did no such thing, all they attempted to do is stop the money being written off as it should have been, by getting in the middle, with a cheap stunty designed to recover any losses. I would not blame Iceland if they told the UK to take a hike, as It is not really their problem, if the banking system fell back like other investments do, investors took a risk, its as simple as that, they have themselves and their greed to blame for any monetary losses.

  • Comment number 18.

    "6. At 10:07am on 06 Mar 2010, barryp wrote:

    If Iceland as a Nation refuses to pay its debts, it will find that it will become a non Nation. "

    Like us.

  • Comment number 19.

    No they shouldn't. People in this country who saved off shore to gain a higher rate of interest should have known the risks and they have only themselves to blame for their losses.

  • Comment number 20.

    The people of Iceland have been living high and mighty for many years benefitting off the banking risky gambles made. Why should they have to not pay it back?? Same could be said of the people of the USA, but we are suffering for our choices. so why should the people of Iceland get away with it?

    People in all countries are having to deal with the consequences of bankers in our countries making poor decisions. USA, UK, Greece, Spain, Japan, why should Iceland be a special case?? why is there so much sympathy for he people of Iceland, but no sympathy for the people of the UK, Holland, Greece, USA, Dubai etc....??

    Iceland should be treated no differently than any other country. They should be forced to pay back every cent they borrowed, just like every other country is. Why is Iceland special??

    Perhaps the USA should have a referendum if they should pay back their debt to China. Have a referendum, the people say "don't pay it back" and that means you have no more debt???? how does that make sense?? if that were the case, then every country in the world should also have the right to "vote" whether or not they pay back debts. and then the world would have no more debts.

    the cheek of it astounds me.

  • Comment number 21.

    The greedy councils should be put in trial...and the bankers that took their ill-gotten gains.
    Filthy people.

  • Comment number 22.

    We have lived in an era where the banks have been seen as unbreakable (of course we chose to ignore Barings and BCCI as minor blips). I was dismayed at the time to be constantly reminded by collegues etc.that I should be investing in Iclandic banks as they were getting big returns, I didn't but have so far as a taxpayer had to bail out their investments based upon greed. If the british taxpayer has had to bear the pain why not Iclandic taxpayers? They were happy to share in the success of their banks in the good times.

  • Comment number 23.

    It`s immoral that the people of Iceland should be responsible for the banks fault.
    The banks higher-archy should be jailed for incompetence & given hard labour.

  • Comment number 24.

    The people of Iceland shouldn't pay anything. The Icelandic bank should have been put into administration by Iceland and creditors refunded on a sliding scale, e.g. 100% of first £1,000 50% of next £5,000 down to 1% or nothing, obviously these figures adjusted to match actual funds.
    The UK government should not have paid a penny to the daft and greedy, surely that's the risk you take when gambling finances and not using your local and safer bank, building society, bonds etc.
    I guess the UK bailed out creditors to save the embarrassment that our own councils and charities, instead of putting the money to good use, were also gambling.
    It beggars belief that the UK bailed out the gamblers and now want to crucify the Icelandic people for it. How would any of us feel if we were told we had to find £30,000 for something we had nothing to do with.
    A comment recently was that if 20% of bonuses had been held back over the last ten years then the banks would have had enough money to bail themselves out. It's clear where any compensation should be coming from and it's not the poor Icelandic people. Meanwhile the banks are back to their old tricks again and abusing their power and position. A single bank Barclays has recently announced bonus payments of £3bn. The only way to stamp out bad bank practices is to make the industry itself liable for any losses and not any or all innocent public who are already struggling.

  • Comment number 25.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 26.

    I feel sorry for the people of Iceland. They have been made scapegoat for the mistake of their banking system/government. Isn't it same as British people being asked to bail out RBS and Lloyd TSB? However I have absolutely no sympathy for the local English councils, who have deposited their tax payers money in these banks instead of improving the local living conditions. What a disgrace. Its not very far before every institution in this country start doing these in the name of "saving money for rainy day "!!!!!

  • Comment number 27.

    Why doesn't the UM force all the world banks get together and cancel all the worlds debts so we all start from a level playing field, seeming the banks made this mess it's the least they can do for us all.

  • Comment number 28.


  • Comment number 29.

    I just voted 'Yes'! The deal that the parliament accepted in December should be ratified. I believe it's a good and fair deal, we Icelanders have a moral obligation to pay this and the British and the Dutch made it easy for us to pay up.

    But voting 'Yes' was stupid in a sense that the three governments have an even fairer deal for us Icelanders on the table. So the referendum is completely meaningless as a vast majority is going to vote 'No' in the hope that a this deal will become reality.

    So in a way, my 'Yes' vote is more of a protest againt the corrupt and rotten opposition parties (the Independent and Progressives), the parties responsible for the bust. It's also a protest against the stupid In-defence group and a corrupt President Grimsson who enjoyed the banker's hospitatlity, private jets and yachts during the good years.

  • Comment number 30.

    NO. Those who invested in those banks did so to avoid the tax liability in the UK and Netherlands, you gamble you win or you lose. They lost.

  • Comment number 31.

    I totally agree. The people of Iceland, who had no control over these institutions should not be held to account for the totally incompetent bankers. My Close friends, lost her business, her husband his lucrative job, the banks didn't think twice about taking there assets including there home. Millions like have suffered like that. Good luck to the people of Iceland make the bankers and financial institutions pay. No doubt they all have also indulged in the unpatriotic practice of avoiding paying taxes, and fiddling there expenses.

  • Comment number 32.

    A 'no' vote would surely deny Iceland the opportunity of ever joining the EU.

  • Comment number 33.

    So let me get this clear. In a (sort of) reverse situation, if I owe the bank money (a mortgage for example) and the bank goes bust, I can just vote not to pay up when the administrator calls in the debt? In that case, I'm with the Icelanders. Oh, just hang on a minute though ....

  • Comment number 34.

    Vote No.

  • Comment number 35.

    I want them to vote yes, but honestly in their position I'd vote no. I sympathise with their position that the banking industry as a whole created this mess.

    On the other hand I also agree with the actions Britain took to freeze assets as this was the only way to protect investors.

    But if they were to vote yes, exactly how can they? is each individual going to be changed a Iceland Bank Tax, have their wages "Garnished" till we get all our money back? And seriously how can the UK or any country take the moral high ground on this issue when we also have massive national debt.

    When we can pay off all our own creditors, then we can start getting heavy with those who owe us money.

  • Comment number 36.

    If I remember correctly the government of Iceland should have compensated the savers under a similar scheme to ours but they had no money. Our government did what they could not, which means UK tax payers paid for Icelandic Bank's mistake. Is it fair that our government should let this go? No. It's not fair for anyone to pay for someone else's mistake but in the case of Iceland, it's the right thing to do. This isn't a clear cut situation; it's political. It shows a bit of honour and decency. Telling their government "no" when it is their debt isn't the way I'm afraid and if they do they deserve not one penny from the IMF, which by the way is a collection of other people's money!

  • Comment number 37.

    "Sow as you will reap". Iceland has a Referendum on paying the money back to the Dutch and British. Then UK and the Netherlands should(when the time comes) have a referendum on whether Iceland should be allowed to join the EU. That's fair. People power cuts both ways.

  • Comment number 38.

    So far, in effect, the UK taxpayer has stepped in and saved both Icelandic and UK banks. The burden should be shared.

  • Comment number 39.

    Why should people pay for the governments, the financial regulators and the banks failures.
    When Lehman brothers collapsed London and The Hague did not dare to ask the US to compensate for all the losses, so why should he be different with Iceland?
    At last, London and The Hague have no moral right to blackmail Iceland about the accession of their country to the EU.

  • Comment number 40.

    Iceland is a prime example of why it's better to support the idea of a moneyless, Resource Based Economy. People should take the time to look into the Zeitgeist movement and find out what it's all about.

  • Comment number 41.

    Should Iceland vote 'yes' and sign up to the pay-back plans? NO.

    Are Icelanders being unfairly penalised for the mistakes of the banking industry? YES.

    Is holding a referendum a good way to come to a decision? YES.

  • Comment number 42.

    It is a simple question.
    Whose mistake is it?
    The people or Iceland?
    So why should they pay?

  • Comment number 43.

    "The value of investments can go down as well as up"

    No-one was complaining when they were getting too high returns. Can't have it both ways!

  • Comment number 44.

    I'm amused by the idea of a referendum on whether to pay the lost money back. It's kind of like asking bankers to vote on whether they get a bonus, or asking a defendant in a trial to decide on his or her punishment.

    That said, I don't think the Icelanders should pay the depositers back.
    It is reasonably well know that if you deposit money in a British bank, your funds are guarenteed up to £30k. No such guarentees extend to overseas banks.
    So when savers, won over by the higher rate of interest, decided to deposit in Icesave, they were knowingly or unknowingly taking on extra risk. This risk was realized when the bank collapsed.

    It will be the Icelandic taxpayers who will lose out if the savers get compensated. They are the innocent victims in all this, and they had no part in the decisions that caused the bank to fail.

  • Comment number 45.

    #32. SMorgan wrote:
    "A 'no' vote would surely deny Iceland the opportunity of ever joining the EU"

    I'd imagine that would be no great loss to the Icelandic people

    Though on a serious note; When the gamblers at these banks get it wildly wrong, why is it the public (of any country) who ends up footing the bill? Why are there no convictions?

  • Comment number 46.

    I would have thought that the worlds bankers could have accepted the FACT that they caused this collapse. As usual they act like the financial collapse of the world has nothing to do with them.

    The reason they dont step up is that they are rich and you are poor. Their is no national or multinational group that can punish these men for what they have done, no single country can bring them to heal.

    What is perfectly obvious from the last 24 months is that national governments can do nothing to stop their greed

    So while you have watched your funds/retirements/stocks/bonds collapse in plain sight they continue to rape you.

    Stop blaming your local politicians, PMS, Presidents and dictators, they are powerless against these peeps. Oh BTW they dont exsist lol.

  • Comment number 47.

    Icelanders should vote "NO". The debt is the bank's not the peoples. The people are not responsible for a companies debt. It is for the "bank" to extricate itself from it's debt by outside help. It is their decision. The people can reinvent their own currency and start afresh.

  • Comment number 48.

    I can see why the Icelandics are reluctant to pay this debt. £3.4bn to a country with a population less than Wigan is ~£10,000 per person, including children, so for a family of four that is £40,000!

    And although I think the Icelandics mostly blames their own bankers for this they are also miffed with the UK, regarding Gordan Browns press statements and freezing of Icelandic assets which they may see as the final push of their banks over the edge.

    In the end Iceland however need to pay this debt, whether they like it or not, but I think some more compromises will first have to be arranged.

  • Comment number 49.

    Iceland should be required to acknowledge the debts and give an undertaking to repay them with installments under some medium term arrangement that does not further damage their fragile economy. The EU should offer some assistance giving hope for the future... subject to an end to the unjustified indignation and belligerence of the Icelanders. They need to understand that they are not being dealt with harshly by the UK and Holland and that their problems stem from their own govts. incompetence and greed. Iceland's Membership of the EU should be put on the back burner until they can be considered an ethical trading and trustworthy partner.

  • Comment number 50.

    I want to mention that we are not voting of whether to pay or not. We are protesting an awful deal, the rates (5.55%) on the current loans are beyond anything Iceland is able to pay and it is still not clear how much the assets of Landsbankinn will cover.
    This is about the generations to come and we are about to put a heavy financial burden on our children. The average Icelander is horrified by the actions of a few people, but many of us realize that we should take on the responsibility regardless. When this issue has been solved, Iceland will be able to restore its economy and image. We need a fair solution to this problem!

  • Comment number 51.

    Next time banks ask for repayments of the loans I took, I'll organize a family-wide referendum.

    And if all its members say "no" I'll simply show the banks my middle finger.

    Of course I will not get any loans in the future, and I'll have to file for bankruptcy, but hey, that's my choice.

  • Comment number 52.

    Investments carry risks and people who put money in Icelands banks know this. Leys not forget, they invested out of the Uk in part to avoid paying UK tax; and the UK government stupidly reimbursed them. Greedy arrogant people lost money, their fault, government bails them out, our problem through our taxes.

  • Comment number 53.

    So by the same logic of most of the people on this site, the people of the USA should not be penalized for the actions of their bankers eigther. So USA should just cancel their debts to China, right? Cause it's not the American people's fault, it's the fault of the bankers and politicians.

    So every debt on the planet should just be cancelled right now. That seems to be what most people are saying.

    How naive and idealistic. I'm amazed at the ignorance of the people on this website. I expected the standard of BBC to be higher, honestly.

  • Comment number 54.

    The people of Iceland want to protect their own interests just like we would. If the tables were turned, would we vote yes? I am not so sure we would!

    As for using anti-terrorist legislation, that is outrageous and I feel ashamed.

  • Comment number 55.

    They are lucky to have a referendum.

    We have been repeatedly denied referenda in the UK. Hence we are ruled by foreigners across the Channel.

  • Comment number 56.

    Iceland's bankers come out without liability.
    Greedy and incompetent English councils who invested unwisely in an Icelandic bank, while investing and contributing next to nothing to our towns, also have no liabilities.
    The only people who are being asked to fiscally make reparations are the average and innocent Icelanders.
    A case of the hardworking and honest supporting the greedy and incompetent.
    No justice here.

  • Comment number 57.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 58.

    37. At 11:15am on 06 Mar 2010, Walter Russell wrote:
    "Sow as you will reap". Iceland has a Referendum on paying the money back to the Dutch and British. Then UK and the Netherlands should(when the time comes) have a referendum on whether Iceland should be allowed to join the EU. That's fair. People power cuts both ways.

    LOL like that's a threat!

  • Comment number 59.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 60.

    You see the problem is money! Though if I was to say let's try and change policy in our country, to lessen the effect of money on our lives, I am sure I will be ridiculed but we all know it's true!
    This debt is not of Icelands making and therefore why should the people be even asked to compensate investors. Imagine walking into a betting shop and putting all your money on a horse that loses. You would not expect anyone to bail you out, or feel sorry for you, would you? Yet the worlds banking system is nothing more than a big betting shop but like with LLoyds and this crash we have to cover their wager but the best bit is, when these ignorant, greedy, people say the poor take from them LOL and let's not forget when the system wins They have years of very good interest.
    It's wrong, so wrong and like I say it is time to lessen moneys effect on our society, the way it should be is money for the things we want and the things we need as human beings Food, Water, Housing, and of cause our energy for electricity, warmth and the like, for us by us.
    Its time for change let's make it a pure domocratic change and start demanding policies for the good of all not the few. Thses old ancient policies have not and will not work and it's time for somthing new.

  • Comment number 61.

    At least the Icelandic citizens are being given the option of whither or not they want to bail out their banks after the massive failure by both the bankers and the politicians employed to regulate them. I don't recall our politicians asking what we wanted done with our money, they just spent it on other than what they were given it for.

    As far as Icelandic repayments are concerned, I seem to recall a figure of in the region of £2.5bn being loaned by the UK government to reimburse UK citizens and institutions that lost money due to Icelandic bank failures. So that's what ought to be repaid - not a penny more, not a penny less.

  • Comment number 62.

    As an Icelandic citizen, I would vote "No" and tell the EU and the financial world to go forth and multiply.

    As an Icelandic politician, I would make it clear that the country would seek to pay the original amount rather than the doubling imposed by the UK other EU countries. But on the demands for the increased amount, I would say "No" and tell the EU and the financial world to go forth and multiply.

  • Comment number 63.

    I remember looking into this cash savings opportunity, back in the day?

    I also remember that an Indian CEO was behind it?

    I contemplated investing, but had to undergo serious surgery, so did not invest. So a mixed blessing?

    What Iceland, UK, IMF and investors in ICESAVE must disclose ARE:


  • Comment number 64.

    Perhaps the people of Iceland don't want to pay back money that has been entrusted to Icelandic banks but that money is rightfully the savers and it has also given Icelanders a good standard of living and so should be returned forthwith and as the Banks are responsible let them protest to them and if they want people to ever invest again in their country they should support the paying back

  • Comment number 65.

    If I were from Iceleand I would be voting against paying the debts of banks.

    As has been shown everywhere Bankers will accept bailouts and then carry on as if nothing has changed pocketing their large bonus payments for profit they made out of the chaos they created.

    The time for spivs and wide boys gambling with other peoples money and trousering the winnings is over. Let them go to the wall like any other business which is not viable.

  • Comment number 66.

    Before we castigate the Icelandic people if, as expected, they vote NO in their referendum about repaying their bankers' debts to Britain we should pause and reflect that our FSA were supposed to regulate foreign banking enterprises in the U.K. and they failed us miserably. That aspect of where the blame lies seems to have been conveniently forgotten and blame shifted to the people of Iceland. Clever spin by the real culprits.

  • Comment number 67.

    I thought that the UK & Dutch Governments "lent" the money to Iceland so that they could repay their investors.

    So if its a loan surely the Icelandic people have a moral obligation to repay us. Having said that the terms would need to be affordable and spread over 25 years. That wouuld be fair.

    However if I was Icelandic I would vote no.

    At least they got a vote!

  • Comment number 68.

    My question is why did the UK and Dutch governments repay investors who lost their savings in the first place? Apart from Lehmann Brothers already mentioned, here in Australia we had a large investment firm called Storm Financial who went under. A lot of people lost their life savings and superannuation they were relying on for retirement. The Australian government didn't repay those people. Make an investment choice, you take a gamble. Maybe people will realise they shouldn't have all their eggs in one basket and spread their investments around a bit.

    The only reason the Icelandic government should have to pay up is if they owned the bank. If it was private, bad luck.

  • Comment number 69.

    BarryP @6

    There is as little reason for Icelandic citizens to pay the debts of six or seven of their corrupt Financiers ,( who have all now fled the Country), as there is for Britains Taxpayers to bail out our corrupt Financiers and Bankers.

    And by the way, they are a responsible, sober People and have not refused to pay but have instead asked for longer to pay as they consider the timescale proposed to onerous.
    That is why they are having a Referendum on the Terms and Conditions of Repayments.

    Those at the top of the Pyramid must be told by those at the bottom:

  • Comment number 70.

    It is a difficult choice.

    I do not see that we (or any other country) has the right to force them to repay the debts. ARE they, in fact, debts, or just failed investments? The UK government won't pay the shareholders of Northern Rock any compensation for stealing their shares, so, by the same measure why should a country repay anything for people who made what WAS seen as a 'riskier investment' because that risky investment failed?

    However, failure to pay will make other countries more wary of investing in financial organisations in that country for a while (at least 6 months, until the UK/US bankers want even more bonuses), so that is the other side of the argument.

    If anyone should be forced to repay anything, it should be the councillors who greedily invested their constituents' money in a risky investment without asking, and without any safeguards.

    Individuals who invested their own money in Icelandic banks got what they deserved - it was a risky investment. It failed. Live and learn.

  • Comment number 71.

    Oh to live in Iceland where my opinion actually counts. My cases are packed and my thermals have been aired.
    Seriously I have reservations about the people of Iceland having to pay off their banker's debts. What the banks sow - so shall they reap.

    Has anyone seen my snowshoes?

  • Comment number 72.

    What happened to democratic ideals? Surely, that should be an important consideration. If the people voted not to pay, as common sense dictates they will, why must the government of another country interferes in a proper democratic decision of the whole nation.

    If a foreign government can determine unilaterally to accept democratic decision of another country when it favours them and reject it when it is not beneficial surely this is hypocrisy and speaks volume about how much you actually believe in democracy.

  • Comment number 73.

    Very unfair, but barring a return to bartering I am not sure they have a choice.

  • Comment number 74.

    "27 Why doesn't the UM force all the world banks get together and cancel all the worlds debts so we all start from a level playing field, seeming the banks made this mess it's the least they can do for us all."

    Because the money has come from somewhere. Countries can't just cancel their debts. Lots of that money has been lent by investment companies (ie pension companies). So, if the country cancels their own debt, lots of people's pensions disappear overnight.

    If someone invests in 'government bonds' (or 'gilts) - that's investing in the country's debt. So, anyone/any organisation who has government bonds would lose their value if the debts were cancelled.

  • Comment number 75.

    IS it possible that 'Icesave' was set up by foreigners in Iceland, under a gap in Icelandic financial/banking laws?

    The Icelandic Government should be honest about this 'gap' to it's people and the IMF, PLUS acknowledge they were 'conned' by a foreign scam?

    The IMF should absorb the debt in Iceland caused by a foreign banking scam? The IMF pay and clear debts and banking scams in Africa everyday, why not Iceland?

  • Comment number 76.

    The people of Iceland have my full understanding. They have high-lighted the anarchic character of free market capitalism. The whole banking system is corrupt. Yet still the people at the top get baled out by the public purse. For what? for taking risks with other peoples money? To any-one unfortunate enough to rely on unemploynment benefit, try telling the paymaster that you don't have enough money left because the horse you backed didn't win. Capitalism for the poor, Socialism for the very rich,
    Sick. Viva Iceland, down with economic hit-men.

  • Comment number 77.

    Iceland are the same as pretty much every other western country, paying off the bad debts of bankers. It is about time the bankers & financiers world wide were reigned in, they've allowed their dodgy business to directly affect everyone & governments, too stupid & greedy to put reasonable controls on OUR money, have allowed them to carry on as normal. Ultimately the poor get poorer & the few fat cats get fatter.

    I like the Muslim banking service, you don't get interest & you also only pay back as much as you borrow. There's no invisible money, it's just straight banking. Western banks could learn a few lassons there.

  • Comment number 78.

    The last thing there is to trade is "democracy" it self and our politicians are on their way to trade this in for the savior of Milton Freedman's Free Market System and the control from the World Financial service sector.

    Under no circumstances shall the I Icelanders cover this outstanding amount but rather let the investors and banks take the hit.
    The investors had choices when they put their assets into the Icelandic banks but they were blinded by large and unrealistic returns. Now they want their money covered by ordinary people that never involved in that system to cover for their risky deposits.

    Break the backs of this foolish bailout system that can only make things worse, perhaps not short-term but long-term yeas, and let people finally understand how their politicians and their financiers have traded away their hard-earned savings and let them take the blame. This is looting and the guilty ones are getting away.

    Stand up before even democracy is being traded on the world financial markets as a commodity to cover risk with. Perhaps we shall name it DDS, "democracy default swap". I'm sure it will perform well since democracy is at stake here and the risk for such needs to be covered

  • Comment number 79.

    Considering that the UK government has paid back this money to Icesave savers from public funds, its only right that Iceland pays this money back to the government. However, if I was Icelandic I'd probably vote no as I think they're going to be in a mess for some time.

  • Comment number 80.

    Should Iceland be forced to repay debts?

    YES ............ in fact if they do not have the honour or decency to fulfil their debts , then their international assets should be seized by an International Court and used to repay any debts and they should be sent into international isolation until all such debts ARE repaid , as the meerkat says ...... simples !

  • Comment number 81.

    The UK government bailed out British individuals who saved with Icesave. Ditto for the Dutch. The citizens of Iceland are in no way responsible either for reckless investments by UK individuals or the complete mismanagement of Icesave. I believe, besides standard financial and legal procedures, criminal investigations should be initiated against the bankers. The referendum and related headlines hide the real issues- the finance criminals continue 'business as usual'

  • Comment number 82.

  • Comment number 83.

    Three cheers for the voters in Iceland who vote "NO". So a bank fails? Banks are just a business, one fails and why should the taxpayers pay? I just don't get the connection between a business failure and a taxpayer bailout. I lost money last year in a business deal. I do not expect the USA tax payers to pay me back. Am I missing something here ?

  • Comment number 84.

    Congratulations Iceland, a people with some backbone. It is such a shame that our feeble politicians seem unable to grasp public opinion with regard to the banking scandal. It simply beggers belief that banks can hand out 100 £1000000 plus bonuses to individuals who are already overpaid- it is completely crazy and so far from fair that is off the scale!

  • Comment number 85.

    If the International finance legislation that both Iceland & UK signed up to says that the respective Governments are responsible for a guaranteed amount of personal defaulted money (in UK it's first £50k not including Nothern Rock but they will soon be back at £50k), even if caused by banking collapse/fraud then they are obliged to pay. Of course a Government pays with taxpayers money so the end result, like in UK, is the Icelandic people pay.

  • Comment number 86.

    I recall that when Egypt was unable to pay its debts, Britain and France took over the country's finances (and effectively the country) until they were paid.

    I think the Icelandic flag would look nice as part of the Union Jack.

  • Comment number 87.

    Well yes, the government in England bailed our banks out no doubt paid with tax payers money, so iceland should bail their banks out paying with their taxpayers money, if not it means we tax payers are bailing that country out as well.

  • Comment number 88.

    The banks and those in charge should pay - NOT the people.
    It is wonderful that at least some rememants of democrassy are still alive unlike this country where we have no choice.

  • Comment number 89.

    I don't see why the Islandic people should pay for the mistakes of their banks. It's a bit like endorcing the "pay as you throw" thing we discussed in the other HYS thread. Why should the people pay for the mistakes of their government?

  • Comment number 90.

    Why should the average Icelander pay?
    Did the average Icelander become too aggressive with bank loans leading to default? Did the average Icelander set interest rates, subprime rates? Was the average Icelander supposed to monitor the performance of foreign bank branches and subsidiaries in other countries, or even his/her own country?
    If I was the average Icelander, I would vote "NO!"
    If the banks and the bankers make mistakes, they are the ones who would fix the mistakes, or pay for the mistakes - including bankruptcy.
    Enough of asking th average citizen to bail-out professionals. What kind of nonsence was that in the first place?
    Imagine if the average American citizen had been given the opportunity to vote before those mega bail-outs were given to American banks. What might the financial position of the United States of America be NOW...if only...

  • Comment number 91.

    corum-populo-2010 wrote:

    IS it possible that 'Icesave' was set up by foreigners in Iceland, under a gap in Icelandic financial/banking laws?

    The Icelandic Government should be honest about this 'gap' to it's people and the IMF, PLUS acknowledge they were 'conned' by a foreign scam?

    I think you will find that the only foreign scam was done by the Icelandic banks on people from the UK/Netherlands. I think you need to a at least do some reading and research before you start accusing 'foreigners'. The Icelandic banks were reckless, that's why they failed.

  • Comment number 92.

    We pay council tax. The council then says we have "X" amount to spend that year. I get that bit! Then we hear councils have been investing our money. What I want to know is where did the money come from they invested? What service was cut or community project was not funded to raise an investment?
    You see the problem, councils trying to run as businesses when really they are there to administer. Council bosses trying to be CEO's of private companies instead of servants of the community.
    This foolishness has to stop!

  • Comment number 93.

    I remember someone telling me, about 10 years ago, he could make enough money to live well (without working) by playing on the giant financial casino (the financial market) with $150.000. He managed to get a 50% return a year average. When I said that this kind of profit could only be made at the expenses of the working masses (World economy growing at a 3-4% average), he told me he wasn't responsible for the world financial system and politics. Knowing Wall Street, Washington, The City and 10 Downing Street were are the forefront of financial deregulation I cannot see how the people of Iceland (who already lost so much in the collapse of their bank) should be held responsible for foreigner accounts losses.
    And as Ian P said earlier "No-one was complaining when they were getting too high returns. Can't have it both ways!"

  • Comment number 94.

    The BBC's Jonny Dymond reports from Reykjavik:

  • Comment number 95.

    chiptheduck wrote:

    They are lucky to have a referendum.

    We have been repeatedly denied referenda in the UK. Hence we are ruled by foreigners across the Channel.

    Hay Lord Ashcroft's party isn't in power yet. And remember the Cons plan for banks, lets the bankers use the huge bonuses we have paid for, to buy back the bank shares, which we own, at a reduced price.

  • Comment number 96.

    As someone who saved with IceSave, I'm a bit annoyed by the ignorance shown by some of the posters on this forum. Firstly, I did pay UK taxes on my savings, as did everyone else who saved with IceSave (except those with ISAs, obviously). It was the **UK** arm of an Icelandic bank, so you're not saving off-shore and you still pay UK taxes. (Notice I'm explicitly saying SAVED, not INVESTED. There's a big difference between the two, especially the risks involved. I know the difference, obviously some posters do not!)

    Secondly, the savings were guaranteed by the Icelandic equivalent of the FSA. At the time, the guarantee was offering to protect a higher amount of money than the FSA. I, nor anyone else, would have thought that the guarantee would be broken by the Icelandic government itself.

    So when the banks collapsed, what happened? Well, one of the first things the Icelandic government said was that they would guarantee the deposits of Icelandic savers, but not those of foreign savers. Now, I hope that when something is 'guaranteed', it won't be reneged upon! Not so according to the Icelandic government!

    Although I don't particularly Gordon Brown, I think he was entitled to freeze the UK assets of Iceland. It was Iceland who broke their guarantee and acted solely in their own interest. They shouldn't be surprised if there is a consequence to their actions. I've absolutely zero sympathy for their position.

    If Icelanders refuse to pay back their debt, then I think no sane person will ever trust their country with money again. Not that I'll ever be doing that again!

  • Comment number 97.

    I agree with others on this board - its the Banks that need to be dealt with, not the people of Iceland.

    I am disgusted by the obscene levels of bonus payments. The number dwarfs the money owed by Iceland. Lets not destroy our good relations by scapegoating an easy target. Very little has been done to effect organisational change in the Banks - these guys still think they 'make rain'. We need people to work in teams and spread the banking knowledge.

  • Comment number 98.

    I don't remember the people of Iceland complaining whilst they were enjoying the longest sustained economic boom in their history. I don't remember the people of Britain complaining when Gordon Brown was shouting that we'd "ended the cycle of boom and bust" and millions of people were "releasing equity" in their houses or stacking up buy-to-let mortgages. Now it's pay back time. We can't have it both ways.

    The people of Iceland won't want to pay as none of us would want to but if you default on your debts, you tend to find that no-one will ever lend you money again and no-one will ever invest in you again. In the long run, it's far far cheaper just to pay off the debt.

    As for the banks in the UK, all of Labour's promises of the new world and all this never happening again don't seem to be working. Even the state owned banks are paying out mega bonuses and the 90% mortgage has already returned. So here we go again.

  • Comment number 99.

    I can understand why Icelanders are voting "NO."

    However, there are other ways to solve this dispute and with a little imagination the EU could organise it.

    Iceland has a huge natural resource in geothermal energy - powered by volcanoes. There is more than enough natural energy to provide all of the EU's power needs for ever.

    So why don't we use the debt to buy shares in their geothermal resource and help them harness and develop it? It would require EU investment but it would pay for itself over time and provide Europe with a clean energy source independent of oil, coal or nuclear.

    Iceland would then be able to pay off its debts and generate a guaranteed income for itself and its shareholders.

  • Comment number 100.

    Why are people who are so quick to blame the UK financial crisis on the government so eager to defend Iceland's governments for there's.

    I congratulated the Government for putting UK citizens first when it used anti-terrorist legislation to freeze Icesave assets in the country.


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