Iceland’s President Ólafur Ragnar Grímsson has decided to refrain from signing the legislation for Icesave and have it decided by the nation’s voters. President Grimsson stated that one of the reasons behind his presidential ‘veto’ was that a significant part of Iceland’s population (in total; approximately 319,000 people) expressed that they wanted a national referendum on Icesave through various polls. That significant number also signed a petition demanding that the president put the Icesave Deal to a national referendum.
Some Iceland officials expressed surprise at President Grimsson’s decision because Iceland’s parliament had a vote of 44 - 16 for the approval of the legislation. President Grimsson’s veto is the third in the 66 year-old history of modern Iceland politics; the second time being Grimsson again blocking Iceland’s repayment of a debt of more than $5.3 billion to the Netherlands and the United Kingdoms.
Although adorned with very few political powers, the president of Iceland can either approve a legislation or hold the legislation up for a national referendum.
The debt arose due to the failure of Icesave in 2008 which took in Dutch and British deposits. After the governments of Netherlands and the U.K. compensated the people who had put money into Icesave, the two have requested Iceland to compensate the governments for the loss of money which totals up to at least $5.4 billion.
That year, several Iceland banks sputtered down which made it even harder to provide a solution for the Icesave failure, put economic burdens on most of the Icelandic population and forced the government to call for a financial aid package from the IMF (International Monetary Fund).
The current (2nd) Icesave Deal gives Iceland until the year of 2046 to pay its debt back at an interest rate of approximately 2.96%.