Icelandic voters appeared Sunday to have rejected a government-approved deal to repay Britain and the Netherlands $5 billion for their citizens' deposits in the failed online bank Icesave.Icelandic voters want no part of "Icesave". Even the name "IceSave" is preposterous. Iceland was save by the fact voters rejected "Icesave". Icelanders would have been debt-slaves for decades had they accepted the original terms.
Partial results of a national referendum suggested the "no" side had gained more than half the votes -- a reflection of enduring anger over the economic havoc wrought by Iceland's risk-taking bankers.
Full results were not due until later Sunday. With partial results in from all six of Iceland's constituencies, the no side had almost 57 percent of the votes and the yes camp just over 43 percent.
"This is of course a disappointing result," said Prime Minister Johanna Sigurdardottir.
Icelanders overwhelmingly rejected a previous deal in a referendum last year. The government hoped a "yes" vote on an improved offer passed by parliament would finally resolve a dispute that has caused friction among the three countries and complicated Iceland's recovery from its economic collapse in 2008.
The dispute has grown acrimonious, with Britain and The Netherlands threatening to block Iceland's bid to join the European Union unless it is resolved.
"Taxpayers should not be responsible for paying the debts of a private institution," said Sigriur Andersen, a spokeswoman for the Advice group, which opposes the agreement. "I think that sends the wrong message onto the market, and sets a wrong precedent."
How many times do citizens have to say no? Hopefully voters give Prime Minister Johanna Sigurdardottir a well deserved boot in the next election.
Moreover, Iceland needs to rethink why it would want to be part of the Eurozone in the first place. I suggest Iceland put the Euro to another vote.
Finally, I am really disappointed in the wimps in Ireland. They should put Ireland's "reverse bailout" to a vote as well. I can guarantee the results in advance.
Banks that make stupid loans should suffer for them, not taxpayers. So far, Iceland is the only country that has taken this common-sense stance.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.
Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.
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