Iceland Prepares for Icesave Referendum Skip to content

Iceland Prepares for Icesave Referendum

The Icelandic government is planning to hold a national referendum on the Icesave legislation, vetoed by the President of Iceland Ólafur Ragnar Grímsson yesterday, as soon as possible, probably on February 20.

The president announces his decision. Photo by Páll Stefánsson.

The parliament will reconvene at the end of this week to discuss the prime minister’s bill on the national referendum as there is no existing legislation on how referendums should take place.

According to Morgunbladid, a bill on national referendums has already been presented at parliament but that bill will now be put aside as the government is planning to introduce a special bill for the Icesave referendum.

President Grímsson had not told the government about his plans to veto the Icesave legislation, which the parliament had passed on December 30, before making a public announcement to that regard yesterday.

“We didn’t know what the president wanted to do. We spoke with him, of course, and reviewed the situation and told him about our concerns that he would send it to a referendum,” said Prime Minister Jóhanna Sigurdardóttir.

“He was going to speak with me before announcing his decision but for some reason he didn’t tell me anything before telling the nation,” the PM continued.

The leaders of the government met with leaders of the employment market late last night to review the situation. There are concerns that their stability pact might be in jeopardy.

Minister for Foreign Affairs Össur Skarphédinsson discussed the matter with all foreign ambassadors in Iceland yesterday. He also talked with Mark Flanagan, a representative of the International Monetary Fund (IMF) in Iceland.

Flanagan released a statement yesterday declaring that an agreement on Icesave is not a condition for the IMF’s economic stability program for Iceland, provided that the program is fully financed.

Skarphédinsson said he is not concerned that the president’s decision to send the Icesave legislation to a national referendum will upset Iceland’s application process to the European Union.

However, a spokesperson for the HM Treasury said British authorities are planning to request the EU’s involvement in the Icesave matter, Morgunbladid reports.

Yesterday, Fitch Ratings lowered the Icelandic state’s credit ratings to junk.

Click here to read an analysis of the president’s decision.

Click here to read the president’s declaration in English and here to read an English declaration issued by PM Sigurdardóttir.

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