2010 Icelandic Icesave referendum

Referendum held in Iceland on 6 March 2010 March 2015 Act No. 1/2010 provides for amendments to Act No. 96/2009, which authorizes the Treasury Secretary to provide a State guarantee on bonds issued by the British and Dutch governments to the Investors' and Investors' Guarantee Fund, at the expense of the Treasury, in order to make payments to the investors of the Landsbanki Íslands hf.The Althing passed Law No. 1/2010 but the President refused to sign it.Should Law No. 1/2010 remain in force? 2010 03 06 yes Iceland 2,599 134,392 7,240 229,926 The 2010 Icesave referendum (is Þjóðaratkvæðagreiðsla um Icesave), was held in Iceland on 6 March 2010.https://news.bbc.co.uk/2/hi/business/8467936.stm Icesave referendum set for 6 March 19 January 2010 19 January 2010 BBC News 21 January 2010 https://web.archive.org/web/20100121032416/http://news.bbc.co.uk/2/hi/business/8467936.stm live The referendum was held to approve the terms of a state guarantee on the obligation of the Depositors' and Investors' Guarantee Fund (is Tryggingarsjóður innstæðueigenda og fjárfesta), in particular a €3.8 billion loan (€11,964 per person) from the governments of the United Kingdom and the Netherlands to cover deposit insurance obligations in those countries. Iceland plans vote on bank payout https://news.bbc.co.uk/2/hi/business/8441312.stm BBC News 5 January 2010 5 January 2010 9 November 2020 https://web.archive.org/web/20201109032100/http://news.bbc.co.uk/2/hi/business/8441312.stm live . Iceland decision on bank set for referendum http://www.rte.ie/news/2010/0105/iceland.html RTÉ News 5 January 2010 5 January 2010 18 January 2010 https://web.archive.org/web/20100118193733/http://www.rte.ie/news/2010/0105/iceland.html live . The referendum was held under article 26 of the Constitution of Iceland after President Ólafur Ragnar Grímsson refused to counter-sign the corresponding Act of Parliament (known as the second Icesave bill) into law on 5 January 2010.Declaration by the President of Iceland https://web.archive.org/web/20110722021624/http://english.forseti.is/media/PDF/10_01_05_declaration_w_sign.pdf 22 July 2011 , 5 January 2010. The proposal was resoundingly defeated, with 98% voting against and less than 2% in favor. The referendum was the first to be held in Iceland since 1944, and required special legislation. The Althing (Iceland's parliament) approved a motion on 8 January 2010 which called for the referendum to be held by 6 March at the latest. The motion passed by 49–0 with 14 abstentions. Referendum due on Icesave pay-out https://news.bbc.co.uk/2/hi/business/8449661.stm BBC News 8 January 2010 10 January 2010 9 January 2010 https://web.archive.org/web/20100109052030/http://news.bbc.co.uk/2/hi/business/8449661.stm live. The date of the referendum was later set for 6 March. Background Icesave dispute The liabilities of the Depositors' and Investors' Guarantee Fund arise from the 2008–2012 Icelandic financial crisis, which saw Iceland's three main commercial banks collapse within the space of a week. One of those banks, Landsbanki, had taken retail deposits from more than 400,000 British and Dutch customers through its branches in London and Amsterdam, through a product known as "Icesave". At the time of the economic collapse, the Depositors' and Investors' Guarantee Fund had equity of only 10.8 billion krónur,ISK8.3bn at the end of 2007 (Financial statements 2007 http://wayback.vefsafn.is/wayback/20140330010516/http://www.tryggingarsjodur.is/modules/files/file_group_26/arsreikningur%202007_enska.pdf 30 March 2014 ) plus ISK2.5bn raised in 2008 to keep within the statutory minimum (Press release https://web.archive.org/web/20110722022710/http://www.tryggingarsjodur.is/News/7219/ 22 July 2011 ). about €68 million at the exchange rates of the time and far from sufficient to cover the Dutch and British claims. The initial reaction of the Icelandic authorities was to disclaim state responsibility for the shortfall in the insurance fund, pointing out that both the Guarantee Fund and Landsbanki were private corporations (although the Guarantee Fund was set up and operated under a specific Act of Parliament). One of the governors of the Central Bank of Iceland, former Prime Minister Davíð Oddsson, was interviewed on Icelandic public service broadcaster RÚV and stated that "we [the Icelandic State] do not intend to pay the debts of the banks that have been a little heedless". Excerpts: Iceland's Oddsson Wall Street Journal https://www.wsj.com/articles/SB122418335729241577?mod=googlenews_wsj#articleTabs%3Darticle 17 October 2008 26 October 2008 7 September 2020 https://web.archive.org/web/20200907055241/https://www.wsj.com/articles/SB122418335729241577?mod=googlenews_wsj#articleTabs%3Darticle live This led to a diplomatic dispute, and the unprecedented (and controversial) freezing of Landsbanki assets in the United Kingdom through the Landsbanki Freezing Order 2008.HM Treasury http://www.hm-treasury.gov.uk/statement_chx_081008.htm Alistair Darling Statement by the Chancellor on financial stability 18 October 2008 8 October 2008 dead https://web.archive.org/web/20081011062730/http://www.hm-treasury.gov.uk/statement_chx_081008.htm 11 October 2008 The Landsbanki Freezing Order 2008 https://web.archive.org/web/20081212010509/http://www.opsi.gov.uk/si/si2008/uksi_20082668_en_1 12 December 2008 No. 2668. An outline agreement was reached on 16 November 2008, after mediation by France and the European Union. Agreed Guidelines Reached on Deposit Guarantees http://eng.forsaetisraduneyti.is/news-and-articles/nr/3229 Prime Minister's Office 16 November 2008 17 January 2010 https://web.archive.org/web/20100117175556/http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16567&ew_0_a_id=325387 dead Iceland agreed to guarantee the liabilities of the Depositors' and Investors' Guarantee Fund to British and Dutch savers, while the UK and the Netherlands would effectively lend the Guarantee Fund the necessary money. However, the exact terms of the repayment of the loan were not finalized at the time, and negotiations continued into 2009, held up somewhat by the collapse of the Icelandic government in January 2009 and the subsequent elections in April. Loan agreement Iceland finally reached bilateral agreements with the United Kingdom and the Netherlands on 5 June 2009. The liabilities of the Depositors' and Investors' Guarantee Fund were £2.35 billion in the UK and €1.2 billion in the Netherlands. Iceland, the UK and Netherlands Agree on Icesave http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16567&ew_0_a_id=325387 Iceland Review 8 June 2009 25 January 2009 https://web.archive.org/web/20090125225646/http://eng.forsaetisraduneyti.is/news-and-articles/nr/3229 dead . The governments agreed that the money would be paid back between 2017 and 2023, so that repayments on the deposit insurance loan would not coincide with the repayment of loans from the International Monetary Fund (IMF), to whom Iceland had to turn during the financial crisis. First Icesave bill On 28 August 2009, the Althing (Iceland's parliament) voted 34–15 (with 14 abstentions) to approve a bill (commonly referred to as the Icesave bill) to regulate the repayments. Initially opposed in June, the bill was passed after amendments were added which set a ceiling on the repayment based on the country's gross domestic product (GDP). Under the measure, up to 4% of Iceland's GDP growth (in sterling terms, from a 2008 base) would be paid to Britain from 2017 to 2023 while the Netherlands would receive up to 2% of Iceland's GDP growth for the same period. https://www.reuters.com/article/ousiv/idUSTRE57R3B920090828 Iceland parliament approves debt bill Omar Valdimarsson Reuters 28 August 2009 1 July 2017 6 November 2020 https://web.archive.org/web/20201106082041/https://www.reuters.com/article/ousiv/idUSTRE57R3B920090828 live . Opponents of the bill argued that Icelanders, already reeling from the crisis, should not have to pay for mistakes made by private banks under the watch of other governments. However, the government argued that if the bill failed to pass, the UK and the Netherlands might retaliate by blocking disbursements from the IMF. Second Icesave bill The British and Dutch governments did not accept the amendments to the negotiated deal that had been placed into the first Icesave bill, British and Dutch stance on Icesave hardening http://www.icenews.is/index.php/2009/09/28/british-and-dutch-stance-on-icesave-hardening/ Icenews 28 September 2009 5 January 2010 3 February 2010 https://web.archive.org/web/20100203022828/http://www.icenews.is/index.php/2009/09/28/british-and-dutch-stance-on-icesave-hardening/ dead . and without a mutually agreed deal continued opposition to payment of the second tranche of the IMF loans. PM: Iceland cannot wait much longer for IMF payout http://www.icenews.is/index.php/2009/09/29/pm-iceland-cannot-wait-much-longer-for-imf-payout/ Icenews 29 September 2009 5 January 2010 24 March 2012 https://web.archive.org/web/20120324111432/http://www.icenews.is/index.php/2009/09/29/pm-iceland-cannot-wait-much-longer-for-imf-payout/ dead . Revised loan agreements negotiations, including the cap on repayments, were concluded on 19 October 2009 and the issue went back to the Althing on the same day. A second Icesave bill was passed on 30 December by 33–30 (no abstentions). Icesave legislation passed by Althingi in Iceland http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16567&ew_0_a_id=355947 Iceland Review 31 December 2009 5 June 2011 https://web.archive.org/web/20110605220112/http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16567&ew_0_a_id=355947 dead . The bill was presented to President Ólafur Ragnar Grímsson at a routine meeting of the government the next morning. Grímsson refused to sign the bill immediately, pointing out that it was less than 24 hours since it had been passed by the Althing, and asked for more time to consider it. News flash: Iceland President did not sign Icesave into Law this Morning http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16567&ew_0_a_id=355957 Iceland Review 31 December 2009 1 March 2012 https://web.archive.org/web/20120301002103/http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16567&ew_0_a_id=355957 dead . Article 26 of the Constitution of Iceland states that bills passed by the Althing must be counter-signed by the President within fourteen days or face a national referendum. The President had previously scheduled a meeting for 2 January 2010 with campaigners from the "InDefence" movement, which opposes the bill. At the meeting Indefence presented a petition bearing 56,089 signatures (nearly 25% of the Icelandic electorate) urging Grímsson not to sign the bill. Icesave Pressure Increasing on Iceland's President http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16567&ew_0_a_id=355964 Iceland Review 2 January 2010 5 June 2011 https://web.archive.org/web/20110605220841/http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16567&ew_0_a_id=355964 dead . By 4 January, the number of signatories had risen to 62,000. Iceland Still Awaits President's Icesave Decision http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16567&ew_0_a_id=356001 Iceland Review 4 January 2010 5 June 2011 https://web.archive.org/web/20110605220928/http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16567&ew_0_a_id=356001 dead . However, the leaders of the Confederation of Labor (ASÍ), the Federation of State and Municipal Employees (BSRB), the Confederation of Employers (SA) and the Federation of Icelandic Industries (SI) all urged the President to pass the legislation. President of Iceland Vetoes Icesave Legislation http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16567&ew_0_a_id=356059 Iceland Review 5 January 2010 14 January 2010 https://web.archive.org/web/20100114080456/https://www.icelandreview.com/icelandreview/daily_news/?cat_id=16567&ew_0_a_id=356059 dead Grímsson announced his decision not to sign the bill at a press conference in his official residence (Bessastaðir) on the morning of 5 January 2010. Reactions before the referendum The Icelandic government, led by Prime Minister Jóhanna Sigurðardóttir, immediately expressed its "disappointment" with the President's decision and stressed that "the government of Iceland remains fully committed to implementing the bilateral loan agreements and thus the state guarantee provided for by the law." The Government committed to the Economic Program http://eng.forsaetisraduneyti.is/news-and-articles/nr/4089 Prime Minister's Office 5 January 2010 dead 5 January 2010 11 June 2011 https://web.archive.org/web/20110611130409/http://eng.forsaetisraduneyti.is/news-and-articles/nr/4089 The UK Financial Services Secretary, Lord Myners, responded saying that "The Icelandic people, if they took that decision [not to accept the bill], would effectively be saying that Iceland doesn't want to be part of the international financial system," https://news.bbc.co.uk/2/hi/business/8441312.stm Iceland leader vetoes bank repayments bill BBC News 5 January 2010 5 January 2010 9 November 2020 https://web.archive.org/web/20201109032100/http://news.bbc.co.uk/2/hi/business/8441312.stm live . while Dutch Minister of Finance Wouter Bos called such a decision "unacceptable", saying that, whatever the outcome of the referendum, Iceland would still be "compelled to pay back the money". http://www.volkskrant.nl/economie/article1334242.ece/Bos_uitblijven_oplossing_Icesave_onaanvaardbaar Bos uitblijven oplossing Icesave onaanvaardbaar De Volkskrant 5 January 2010 5 January 2010 8 January 2010 https://web.archive.org/web/20100108030022/http://www.volkskrant.nl/economie/article1334242.ece/Bos_uitblijven_oplossing_Icesave_onaanvaardbaar live . nl A spokesman for UK Prime Minister Gordon Brown reacted in similar terms: "The Government expects the loan to be repaid. We are obviously very disappointed by the decision by the Icelandic President, but we do expect Iceland to live up to its legal obligations and repay the money." British fury after Iceland blocks £2.3bn repayment https://www.independent.co.uk/news/world/europe/british-fury-after-iceland-blocks-16323bn-repayment-1858988.html The Independent 6 January 2010 29 October 2017 3 March 2016 https://web.archive.org/web/20160303231524/http://www.independent.co.uk/news/world/europe/british-fury-after-iceland-blocks-16323bn-repayment-1858988.html live . Norway announced that its promised loan to Iceland would not be paid out before the national referendum has been settled. Iceland president's Icesave decision drawing harsh international response http://www.icenews.is/index.php/2010/01/06/iceland-president%E2%80%99s-icesave-decision-drawing-harsh-international-response/#more-11262 IceNews 6 January 2010 6 January 2010 11 January 2010 https://web.archive.org/web/20100111193531/http://www.icenews.is/index.php/2010/01/06/iceland-president%E2%80%99s-icesave-decision-drawing-harsh-international-response/#more-11262 live The Norwegian loan is part of a €1.775bn package agreed between Iceland and the four other Nordic countries on 1 July 2009. Background information on Nordic loans to Iceland http://eng.fjarmalaraduneyti.is/publications/news/nr/12286 Ministry of Finance 3 July 2009 20 July 2011 https://web.archive.org/web/20110720192703/http://eng.fjarmalaraduneyti.is/publications/news/nr/12286 dead Credit rating agency Fitch lowered its rating on Icelandic sovereign debt from BBB− to BB+ (junk-bond grade). http://www.nu.nl/economie/2156159/lagere-waardering-ijsland.html Lagere waardering IJsland nu.nl 5 January 2010 5 January 2010 21 January 2010 https://web.archive.org/web/20100121014902/http://www.nu.nl/economie/2156159/lagere-waardering-ijsland.html live . nl Results Icelandic loan guarantees referendum, 2010http://www.statice.is/?PageID=2465&src=%2Ftemp_en%2FDialog%2Fvarval.asp%3Fma%3DKOS04104e%26ti%3DResults+for+referendum+6+March+2010+++++%26path%3D..%2FDatabase%2Fkosningar%2Fthjodaratkv%2F%26lang%3D1%26units%3DNumber%20%2Fpercent Results for referendum 6 March 2010 by Category and Sex Statistics Iceland 18 May 2010 12 April 2011 14 November 2010 https://web.archive.org/web/20101114012326/https://www.statice.is/?PageID=2465&src=%2Ftemp_en%2FDialog%2Fvarval.asp%3Fma%3DKOS04104e%26ti%3DResults+for+referendum+6+March+2010+++++%26path%3D..%2FDatabase%2Fkosningar%2Fthjodaratkv%2F%26lang%3D1%26units%3DNumber%20%2Fpercent live 2599 136991 134392 229926 7240 Notes "note" See also 2011 Icelandic Icesave referendum Icesave dispute References 30em External links Act No 96/2009 (first Icesave bill, certified translation) Bill amending Act No 96/2009 (second Icesave bill, draft translation provided by the Althing) Other documents related to the second Icesave bill, provided by the Althing Category:Referendums in Iceland Category:2010 referendums Category:2010 in Iceland Category:Iceland–United Kingdom relations Category:Iceland–Netherlands relations Category:March 2010 in Europe Category:March 2010 elections