Iceland voters reject plan to repay bank debt

Voters in Iceland issued a resounding “no” in a referendum on whether to approve a renegotiated deal to compensate Britain and the Netherlands over the 2008 collapse of Icesave Bank, leaving the issue to be settled in court.  

Prime Minister

Jóhanna Sigurðardóttir

France 24/Reuters

Iceland faces more economic uncertainty and a drawn-out European court case after its voters rejected for a second time a plan to repay $5 billion to Britain and the Netherlands from a bank crash.

The British and Dutch governments voiced disappointment with the result of Saturday's referendum, in which almost 60 percent of voters opposed the repayment deal.

"We must do all we can to prevent political and economic chaos as a result of this outcome," Prime Minister Johanna Sigurdardottir told state television.

The issue will now be settled by the court of the EFTA Surveillance Authority (ESA), the European trade body overseeing Iceland's cooperation with the European Union.

"My estimate is that the process will take a year, a year and a half at least, Finance Minister Steingrimur Sigfusson told a news conference. 

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Foreclosuregate Explained: Big Banks on the Brink

Peter White
Truth-Out

Scandal is spreading across Wall St. like a very bad case of poison ivy. A rash of fraudulent home foreclosures has exposed some of the nation's biggest banks to an even worse condition ... bankruptcy.

Until late 2007, the money boys on Wall St. made a bundle in the housing market. After the bubble burst, they were just itching to cash in on the down side, calling in all those bad loans they made and selling off millions of repossessed homes. According to RealtyTrac, Inc., which compiles such data, lenders foreclosed on 3.2 million properties in the last three years, 288,000 in the last quarter, the highest number on record.


But evidence came to light, first in New York, then Florida, Maine, Ohio, and other states that lenders were taking shortcuts to speed up foreclosures. Law firms hired so-called "robo-signers," some of whom have admitted in depositions that they routinely signed off on thousands of foreclosure papers they had never read and sometimes forged signatures of notary publics who were not present.

"Why don't we have Mickey Mouse sign the thing, instead of having a human being sign it? I mean it becomes meaningless," New York Supreme Court Judge Arthur Schack told PBS "Newshour."

Legally meaningless maybe, but not without consequence for hundreds of thousands of Americans who have been evicted from their homes, many of whom have no jobs, and who were snookered into sub-prime mortgages in the first place.

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