Iceland Faces Crisis After Icesave Rejection |
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January 5, 2009
Iceland's president refused on Tuesday to sign into law a bill to repay more than $5 billion lost by savers in Britain and the Netherlands, forcing the issue to a referendum and stirring fresh turmoil in the crisis-hit country. President Olafur Grimsson's rejection of the unpopular bill put aid from international lenders and his country's aspirations to join the European Union in serious jeopardy, analysts said.
Iceland's president refused on Tuesday to sign into law a bill to repay more than $5 billion lost by savers in Britain and the Netherlands, forcing the issue to a referendum and stirring fresh turmoil in the crisis-hit country. President Olafur Grimsson's rejection of the unpopular bill put aid from international lenders and his country's aspirations to join the European Union in serious jeopardy, analysts said.
A Finnish official said the decision was likely to delay a loan of 1.8 billion euros from Nordic countries. Continued financial assistance is vital in the wake of the north Atlantic island's economic meltdown.
Only once in the republic's 65-year history has a president, whose post is largely symbolic, refused to sign a bill into law. The constitution requires the issue to be put to a public vote if the president refuses to sign.
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