The Icelanders have given the thumbs down to their government’s deal on Icesave with Great Britain and the Netherlands, writes the Volkskrant on Monday in an editorial.

Saturday’s referendum on the deal ended in a resounding ‘nei’ but while the result may be clear the consequences could be less straightforward.
When internet savings bank Icesave went under in 2008, it left the Icelandic government 4 billion euros in debt to the Netherlands and Great Britain. Both countries compensated their savers completely although the first 20,000 euros were legally Iceland’s responsibility. Now, Great Britain and the Netherlands want their money back- with interest- and the people of Iceland are furious about it.
They are furious because they feel they have been had by the financial elite too. Why should they be made to pay for the international shenanigans of a small group of bankers that ended in disaster? The bill comes to 13,000 euros for every one of the 330,000 Icelanders, including children and senior citizens. Their clear ‘no’ shows the depth of their disgust.
The outcome of the referendum is a political fact the government cannot deny. Prior to the referendum, prime minister Johanna Sigurdardottir tried to talk down the importance of a referendum. It wasn’t about the survival of the centre left coalition and really asked a question that was no longer relevant since the deal was off anyway, she argued. Her government had agreed on the deal but president Grimsson had unexpectedly refused to ratify it.
Which prompted a referendum. But by then new talks were being held to achieve a more advantageous deal for Iceland. Unfortunately for Sigurdardotter, the negotiations hit a snag on Friday.
Chances are that talks will be resumed but for now Iceland is in trouble and international isolation looms. As long as this stalemate continues Iceland can wave goodbye to any IMF support. Their Scandinavian neighbours will not be keen to supply loans either.
Iceland will have to take the initiative and The Netherlands and Great Britain will have to show some leniency. The Netherlands, while insisting that Iceland pay back the 1.3 billion euro, should be flexible as to the amount of interest and pay back deadlines. It is understandable that the people of Iceland balk at the thought of transferring the proceeds of an economic recovery straight to the Dutch and British coffers for years to come. There has to be another way.
This is an unofficial translation