Icelandic loan guarantees referendum, 2011
Encyclopedia
A referendum on the loan guarantees repayment by Iceland
to the governments of the United Kingdom and the Netherlands
for their loan guarantees to the Depositors' and Investors' Guarantee Fund of Iceland
(Tryggingarsjóður innstæðueigenda og fjárfesta) over the failure of the Icesave bank was held in Iceland on 9 April 2011. This was the second referendum on the issue after a previous one was held in March 2010. After the referendum failed to pass, the British and Dutch governments said that they would take the case to the European courts.
was held under article 26 of the Icelandic Constitution after President Ólafur Ragnar Grímsson
refused to counter-sign the corresponding Act of Parliament (known as the third Icesave bill) into law on 20 February 2011. The Althingi approved Act No. 1/2010, in amendment to Act No. 96/2009, authorising the Minister of Finance, on behalf of the State Treasury, to issue a state guarantee to cover deposit insurance
over the failure of Icesave. However, the president did not approve the bill, but instead asked for it to be taken to a referendum.
A previous referendum held in Iceland on 6 March 2010 regarding a previous offer made by the United Kingdom and the Netherlands was defeated, with 93% voting against and less than 2% in favour of agreeing to the terms. The Icelandic president once again refused to sign the new deal on 20 February, calling for a new referendum.
stated that "the worst option had been chosen"; Finance Minister Steingrímur J. Sigfússon
ruled out a third referendum, saying that "I think we're getting a very clear sign from this referendum, that further negotiations are ruled out. No use in trying that again." UK Chief Secretary to the Treasury
Danny Alexander
described the decision as "obviously disappointing [and that] we tried to get a negotiated settlement. We have an obligation to get that money back and we will continue to pursue that until we do...We have a difficult financial position as a country and this money would help." He also said that the matter would be referred to the European Free Trade Association Surveillance Authority. The Dutch Minister of Finance Jan Kees de Jager
also said the issue would be taken to the court.
Iceland
Iceland , described as the Republic of Iceland, is a Nordic and European island country in the North Atlantic Ocean, on the Mid-Atlantic Ridge. Iceland also refers to the main island of the country, which contains almost all the population and almost all the land area. The country has a population...
to the governments of the United Kingdom and the Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
for their loan guarantees to the Depositors' and Investors' Guarantee Fund of Iceland
Depositors' and Investors' Guarantee Fund
The Depositors' and Investors' Guarantee Fund is the statutory deposit insurance scheme in Iceland. It is established under Act No...
(Tryggingarsjóður innstæðueigenda og fjárfesta) over the failure of the Icesave bank was held in Iceland on 9 April 2011. This was the second referendum on the issue after a previous one was held in March 2010. After the referendum failed to pass, the British and Dutch governments said that they would take the case to the European courts.
Background
The referendumReferendum
A referendum is a direct vote in which an entire electorate is asked to either accept or reject a particular proposal. This may result in the adoption of a new constitution, a constitutional amendment, a law, the recall of an elected official or simply a specific government policy. It is a form of...
was held under article 26 of the Icelandic Constitution after President Ólafur Ragnar Grímsson
Ólafur Ragnar Grímsson
Ólafur Ragnar Grímsson is the fifth and current President of Iceland. He has served as President since 1996; he was unopposed in 2000, re-elected for a third term in 2004, and re-elected unopposed for a fourth term in 2008. He is the longest-serving left-wing president in the history of...
refused to counter-sign the corresponding Act of Parliament (known as the third Icesave bill) into law on 20 February 2011. The Althingi approved Act No. 1/2010, in amendment to Act No. 96/2009, authorising the Minister of Finance, on behalf of the State Treasury, to issue a state guarantee to cover deposit insurance
Deposit insurance
Explicit deposit insurance is a measure implemented in many countries to protect bank depositors, in full or in part, from losses caused by a bank's inability to pay its debts when due...
over the failure of Icesave. However, the president did not approve the bill, but instead asked for it to be taken to a referendum.
A previous referendum held in Iceland on 6 March 2010 regarding a previous offer made by the United Kingdom and the Netherlands was defeated, with 93% voting against and less than 2% in favour of agreeing to the terms. The Icelandic president once again refused to sign the new deal on 20 February, calling for a new referendum.
Opinion polls
According to an opinion poll carried out in Iceland on 20 and 21 February 60.7% supported the president's decision to refer the law to referendum, while 57.7% said that they would vote to confirm the legislation. More recent polls, however, showed that 52–57% of the population said they would reject the Icesave legislation.Result
Eligibility was open to all those who could vote in general elections. The total electorate was given as 232,460.Reactions
After preliminary results suggested that the referendum would be rejected, both Icelandic and British governments officials expressed their disappointment at the preliminary result. In Iceland, Prime Minister Jóhanna SigurðardóttirJóhanna Sigurðardóttir
Jóhanna Sigurðardóttir , , is the Prime Minister of Iceland. Many years a politician, she was previously Iceland's Minister of Social Affairs and Social Security from 1987–1994 and 2007–2009. She has been a member of the Althing for Reykjavík constituencies since 1978, winning re-election on eight...
stated that "the worst option had been chosen"; Finance Minister Steingrímur J. Sigfússon
Steingrímur J. Sigfússon
Steingrímur Jóhann Sigfússon is an Icelandic politician and Iceland's Minister of Finance. He has been a member of the Althing since 1983 and is the founding chairman of the Left-Green Movement...
ruled out a third referendum, saying that "I think we're getting a very clear sign from this referendum, that further negotiations are ruled out. No use in trying that again." UK Chief Secretary to the Treasury
Chief Secretary to the Treasury
The Chief Secretary to the Treasury is the third most senior ministerial position in HM Treasury, after the Prime Minister and the Chancellor of the Exchequer . In recent years, the office holder has usually been given a junior position in the British Cabinet...
Danny Alexander
Danny Alexander
Daniel Grian Alexander is a British Liberal Democrat politician who has been Chief Secretary to the Treasury since 2010. He has been the Member of Parliament for the Inverness, Nairn, Badenoch & Strathspey constituency since 2005....
described the decision as "obviously disappointing [and that] we tried to get a negotiated settlement. We have an obligation to get that money back and we will continue to pursue that until we do...We have a difficult financial position as a country and this money would help." He also said that the matter would be referred to the European Free Trade Association Surveillance Authority. The Dutch Minister of Finance Jan Kees de Jager
Jan Kees de Jager
Jan Cornelis "Jan Kees" de Jager is a Dutch politician of the Christian Democratic Appeal . He is the Minister of Finance first in the Cabinet Balkenende IV from February 23, 2010 until October 14, 2010, and in the Cabinet Rutte since that date.He previously served as State Secretary for Finance...
also said the issue would be taken to the court.
See also
- Icesave dispute
- Glitnir (bank)Glitnir (bank)Glitnir was an international Icelandic bank. It was created by the state-directed merger of the country's three privately held banks - Alþýðubanki , Verzlunarbanki and Iðnaðarbanki - and one failing publicly held bank - Útvegsbanki - to form Íslandsbanki in 1990...
- Kaupthing BankKaupthing BankKaupthing Bank was an international Icelandic bank, headquartered in Reykjavík, Iceland. It was formed by the merger of Kaupthing and Búnaðarbanki Íslands in 2003 and was the largest bank in Iceland....