Iceland holds referendum on Icesave repayment plan

Icelanders are going to the polls to vote on paying the UK and Netherlands after the collapse of the Icesave bank, with a resounding "no" vote expected. The British and Dutch governments want reimbursement for the EUR 3.8bn they paid out in compensation to customers in 2008. Iceland holds referendum on Icesave repayment plan Talks between the three countries broke down on Friday without agreement. But the prime minister urged people to shun the referendum, saying better payment terms had been tabled. Johanna Sigurdardottir said she would not vote herself as her government sought to continue the talks with Britain and the Netherlands. Opinion polls suggest the majority of voters will reject the referendum. A "no" vote could put billions of dollars of loans from the International Monetary Fund and other countries at risk. Finance Minister Steingrimur Sigfusson attempted to play down the significance of the referendum, called after President Olaf Ragnar Grimsson blocked the initial deal. "It's of utmost importance that we don't over-interpret whatever message comes out of this," he said. "We want to be perfectly clear that a 'no' vote does not mean we are refusing to pay. We will honour our obligations. To maintain anything else is highly dangerous for the economy of this country." Partial results are expected shortly after polls close at 22:00 GMT.

Iceland holds referendum on Icesave repayment plan

Talks between the three countries broke down on Friday without agreement.

But the prime minister urged people to shun the referendum, saying better payment terms had been tabled.

Johanna Sigurdardottir said she would not vote herself as her government sought to continue the talks with Britain and the Netherlands.

Opinion polls suggest the majority of voters will reject the referendum.

A "no" vote could put billions of dollars of loans from the International Monetary Fund and other countries at risk.

Finance Minister Steingrimur Sigfusson attempted to play down the significance of the referendum, called after President Olaf Ragnar Grimsson blocked the initial deal.

"It's of utmost importance that we don't over-interpret whatever message comes out of this," he said.

"We want to be perfectly clear that a 'no' vote does not mean we are refusing to pay. We will honour our obligations. To maintain anything else is highly dangerous for the economy of this country."

Partial results are expected shortly after polls close at 22:00 GMT.