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93.2%

… Was the percentage of the Icelandic electorate that said NO to the Icesave bill yesterday.

The NO result was a foregone conclusion – the only thing of interest, really, was how large a margin would be by which the bill would be voted down. Mind you, at noon today, not all the votes were in because Grímsey island [in the north, the only place in Iceland that straddles the Arctic circle] was unreachable due to weather. But the result is pretty clear already and won’t change by much after this.

All the political leaders are on Silfur Egils as I write this bickering about who was responsible for the collapse and who failed in the Icesave debacle. The same old chestnuts being chewed over ad nauseum [YAWN!]. Predictably the opposition is basking in the glory of the big resounding NO that supposedly will send reverberations throughout the world, and demanding that the government resign. Steingrímur and Jóhanna are adamant that they will not; however, there is so much dissent in parliament right now that it looks like they may not even have a majority any more. A vote of no confidence would not surprise me. Also, as the UK and Holland have repeatedly said, there needs to be unity in parliament for negotiations to continue. Even though the opposition leaders claim they will continue backing the Icesave negotiations, it’s hard to see how they’re going to manage to work together, especially in light of their vehement disagreements at the moment.

Incidentally, the other figures from the referendum are as follows: 1.8 said YES, 4.7% turned in an empty ballot, and 0.3% ballots were invalid. Voter turnout was 63.6%, which has to be considered pretty good for a referendum. By comparison, the largest referendum in recent history, whether Ireland should ratify the Lisbon Treaty, garnered a turnout of around 58%.

Finally, last week I met a young journalism student from Norway, Jo Straube, who is here for a couple of months documenting the situation here in the Land of the Nice. He posts some excellent pictures on his blog Rapporter fra Sagaøya [Reports from the Saga Island], including this one, taken as the votes were counted last night. Worth 1,000 words.

More anon!

Comments

comments

Comments on this entry are closed.

  • Peter Reeves March 7, 2010, 1:50 pm

    By all accounts the Banks have written off $20-30bn to companies. The Government has refinanced the Banks, and will recoup the funds from higher taxes etc. So Icelanders will still pay 3-4 times IceSave.

  • Michael Lewis March 7, 2010, 2:08 pm

    If a CEO had gone to shareholders with a fundamental proposal and the shareholders rejected it by over 90%, I think his/her position would be considered untenable.

    Regulatory authorities need to take some of the blame. Particularly in the UK. When Kaupthing took over UK merchant bank Singer & Friedlander in 2004, there were plenty of ‘raised eyebrows’. If I recall correctly, the press at the time were sceptical about ‘fit and proper’ persons taking over UK banks.

  • JimJones March 7, 2010, 5:27 pm

    Do you have any speculation in regards to how this very extreme no will change anything in Iceland?

    Also, it looks like there may be a problem with comment approval on the Forums as well as the Blog. I sent you a PM with the details(but don’t know if you are getting PM notifications as well).

  • Easy March 7, 2010, 5:29 pm

    Wow!! That picture is indeed priceless!! In fact all the pictures say much more than we could ever discuss here.

  • James Wilde March 7, 2010, 5:31 pm

    The big danger now is not that the government will resign but that the whole parliament, government and opposition will agree to change the constitution, to remove or seriously reduce the president’s powers.

    I hope the Icelanders will not only reject this move but also call for the relevant paragraph (was it no 27) to be strengthened. For example, it would be appropriate to demand that the government/parliament not be allowed to act further in the question until the referendum has been held. Otherwise the situation can arise again as with the 2004 referendum, that the government withdrew the law and avoided the referendum, or in this case, the government continued work behind the scenes and arrived at a stage where it was possible to question the validity of the referendum, or in other words, questioning the sovereignty of the people.

    Once again I wonder, when the government presents a new IceSave law on the basis of the latest agreement, which is only a matter of pennies less per person for the Icelanders, will the president have the balls to say no a second time?

    The ideal situation now would be for the government to put the IceSave business on ice for a bit and concentrate on delivering on some of its election promises – like protecting the homes, openness in government and so on.

  • idunn March 7, 2010, 6:40 pm

    If a cat, I’d be contentedly yawning. Paws out in a long stretch, alert, watching.

    If the result of the vote a foregone conclusion, save whether it would actually take place, the greater question remains what will come in result? I hope not in dissolution of the present government, but that was always the risk. Something needed to be said.

    The outcome may prove better terms for Iceland concerning Icesave. Its negotiators may understand themselves to have broad popular support in seeking the best possible terms, those across the table a greater respect for who they are dealing with. It would be a mistake by either to view this referendum too narrowly, as only a vote on an outdated proposal. Most of those voting surely had far stronger reason, and feelings.

  • Alexander E. March 7, 2010, 6:44 pm

    «Steingrímur and Jóhanna are adamant that they will not»

    What a surprise! They came to power to help people!!! So until people are helped – they won’t resign! No matter how long it might take and what people might think about it! Period….

    «student from Norway, Jo Straube» aka Nordic Analyst? 😉

    PS. Hope this comments brakes through blog’s code

  • Andrew (the other one) March 7, 2010, 6:46 pm

    “Regulatory authorities need to take some of the blame. Particularly in the UK”

    Well the UK taxpayer is already having to pay for all the deposit money over the guaranteed amount. (Iceland is not being asked to refund everything that was lost by the depositors). Isn’t that a tacit admission of some liability already?
    I think you should also add “on Iceland regulators too”, as they allowed the formation of an inadequate deposit insurance scheme and allowed cross loans between the three major banks which effectively brought down all three of any one failed. Plenty of blame to go around.

    On the bright side, the British Chancellor of the Exchequer sounded much more conciliatory as reported by Reuters and the BBC. A strong “no” vote will have been noticed in London.

  • Joerg March 7, 2010, 7:12 pm

    It is bizarre to have the leaders of the opposition parties appear like the spearhead of a grassroots movement, demanding the government to step down as a consequence of this result. Is the memory about the true culprits fading away?

    The government is claiming business as usual and intends to continue negotiations next week, but how realistic is this with an opposition, which is apparently against negotiations. The leaders of the opposition parties might have all the time and private financial backing to continue stalling any solution to this mess for their own personal benefit. But for most people – particularly those, who are highly indebted – finding an agreement should be paramount. As long as the Icesave problem hasn’t been solved, other urgent matters are stalled.

  • sylvia hikins March 7, 2010, 7:57 pm

    The IceSave referendum was dropped from the BBC national news by this afternoon. So the reverberations were minimal. But it was decently reported by the quality newspapers and I did not see any Iceland bashing going on. The general consensus here is that the capital should be repaid, but the interest rate levied on the loan is unfair. But you know the financial pundits are still saying that the Landisbanki Assets are sound and when they mature are not only likely to cover all of the IceSave debt, but there will be a surplus as well. So at a time when the negotiations need to press on (because unless a deal is cut you can’t put this behind you) it is depressing to read about the bickering of your politicians. Can’t someone bash them over the head with a few pots or frying pans??!!!
    sylvia from viking wirral

  • Bromley86 March 7, 2010, 10:11 pm

    Once again I wonder, when the government presents a new IceSave law on the basis of the latest agreement, which is only a matter of pennies less per person for the Icelanders, will the president have the balls to say no a second time?

    The high-end total cost per person that I’ve seen mentioned is 18k euros. Rarely do people that quote that figure mention that current estimates are that 88% of ~4bn euros will be recovered from Landsbanki. So that high end cost drops by 12k euros per person to 6k.

    There are two effects of the new UK/NL deal. Firstly, there’s an interest free period of 2 years. Those 2 years will be the ones when the cost is the highest, as little of the principal will have been paid off and, with the interest rate at 5.5%, would be 450m euros. So that’s 1,500 euros per person, reducing the cost to 4.5k euros p.p.

    The second effect is the lower interest rate. Currently AFAIK 3.4%, but realistically that will have risen in two years time and may well eventually max out at 7%. Still, again, it’s the earliest years that count the most. This is much harder to estimate, but would be in Iceland’s favour. Pulling a figure out of, umm, the air, say 500 euros p.p.

    So the total cost p.p., using the high end figure, is actually more like 4k euros rather than 18k. The latest offer would be an improvement of something like 33% on the old one for the average Icelander.

    To put all this in context, according to the Icelandic Business Minister, the Icelandic economy will shrink by 2-3% more than it would otherwise have if the agreement is not resolved relatively soon. That’s something like $240m-$360m. Call it $300m = 220m euros, or 730 euros per person. So any further improvements in the deal offered will have to be fast or extensive to offset this increased cost to the people.

  • Nick March 7, 2010, 10:11 pm

    Why not hold a referendum saying along the lines “Should people be forced to pay their credit card bills” I am sure you would get a 90% NO vote there too.

  • alda March 7, 2010, 10:22 pm

    Thanks everyone.

    Do you have any speculation in regards to how this very extreme no will change anything in Iceland? — I don’t expect it will change all that much, actually. Icesave has not gone away and needs to be dealt with.

    It is bizarre to have the leaders of the opposition parties appear like the spearhead of a grassroots movement, demanding the government to step down as a consequence of this result. — Yes, it is very bizarre! They’re basking in the glory now, pointing fingers like there’s no tomorrow.

    Why not hold a referendum saying along the lines “Should people be forced to pay their credit card bills” — Ha! Would that the Icesave issue were that simple.

  • kevin o'connor waterford Ireland March 7, 2010, 11:26 pm

    Good analysis by Bromley86 of the swings and roundabouts of the situation,interesting to see what happens next,in a sense people in America,UK and here in the emerald isle ha ha are going through a icesave type thing our elected dictatorship in Dublin has signed the whole lot of us to NAMA 54 billion worth of sound investments of the banks,there have been tax rises and pay cuts,and also to get us back to the 3% budget deficit so we can be good boys in the eurozone, Icelanders just got a vote on it unlike the rest of us.I doubt if Fred the shred would be sitting so pretty at the RBS if the britschers had got a referendum on RBS.

    So what happens next ???????????????????????

  • Andrew (the other one) March 8, 2010, 1:56 am

    I suspect that the present government would like the Black Book to be published as soon as possible. That might damage the opposition. Of course they have to hang in there until then..

  • Andrew Moriarty March 8, 2010, 2:17 am

    “Regulatory authorities need to take some of the blame. Particularly in the UK”

    The regulations from the European Economic Area practically forced the British Financial Authorities to accept the claims regarding solvency of Icesave by the Icelandic government’s financial Regulatory at face value. Which we all know were false.