Icelandic repayment package rejected by voters

The Icelandic referendum on the repayment package to the UK and the Netherlands authorities has delivered a resounding no vote which now puts the Icelandic authorities in a very difficult situation. The multibillion pound loan provided by the UK and Netherlands governments, to compensate savers who lost money in the Icelandic financial collapse, has been a bone of contention for some time. So what next?

The real problems regarding this issue lay behind the scenes and the fact that many in Iceland blame the UK authorities, especially Alistair Darling, for various comments made at the beginning of the financial crisis. There is a feeling that certain comments delivered by Alistair Darling injected more uncertainty into the investment markets and thereby ultimately led to the total collapse of the financial system in Iceland.

The truth of the matter is that the multibillion pound loan package will need to be repaid at some stage as this was part of the agreement between the various parties. Quite how and when this money will be repaid remains to be seen but this has soured relations between the UK, Netherlands and the Icelandic authorities at a time when Iceland needs as many friends in the worldwide arena as it can gather.