Icesave legislation passed by Althingi in Iceland Skip to content

Icesave legislation passed by Althingi in Iceland

Late last night, Dec. 30, following weeks of debate, the Icelandic parliament, Althingi, passed legislation authorizing a state guarantee for the loans granted by the governments of the UK and the Netherlands to the Depositors’ and Investors’ Guarantee Fund of Iceland.

The legislation was passed with 33 votes of 63. Thirty voted against it with no abstentions. In August Althingi had passed a law containing certain preconditions to the state guarantee. These were aimed at ensuring debt sustainability and allowing Iceland to restore its financial system and its economy while at the same time honoring Iceland’s international obligations. According to opposition leaders Bjarni Benediktsson, Chairman of the Independence party and Sigmundur Davíð Gunnlaugsson Chairman of the Progressive party the preconditions have now disappeared or have been watered out.

Two supporters of the left wing coalition government voted against the measure, former Minister of Health, Ögmundur Jónasson, who resigned in late Spetember because of the issue, and economist Lilja Mósesdóttir, both members of the Left green party. Independent Alhingi member, Thráinn Bertelsson, author and film producers, supported the government.

It was noted that two members of Althingi who had previously expressed opposition or doubts about the case voted for the state guarantee of the Icesave debts: Ásmundur Einar Dadason, Chairman of Heimssýn, the coalition against Iceland joining the European Union, and Gudfrídur Lilja Grétarsdóttir, former Chairman of the Icelandic chess federation.

The bill now goes to the President of Iceland, Ólafur Ragnar Grímsson, for signing. The president could refuse to sign the bill, thereby putting it to a national vote. In summer, when the president signed the previous bill into law, he indicated that he did so because of the preconditions and the fact that a big majority of Parliament had contributed to the bill. Now more than 35 thousand people have signed a petition asking the president not to sign, thereby putting the bill to a national vote.

The president has only refused to sign a bill into law once. In 2004 Grímsson became the first president in Iceland’s history to exercise the president’s veto right when he refused to confirm a government bill that was intended to prevent concentration of ownership in the media sector. His move was harshly criticized by the Independence Party, lead by then Prime Minister Davíd Oddsson. Oddsson is now editor of Morgunbladid, the second biggest daily newspaper in Iceland. The veto at that time was exercised, according to the President because “a rift had been formed between the nation and Althingi.” Opinion polls indicate that a great majority of the nation is against the Icesave-legislation.

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