The UK government is none too pleased with Iceland’s recent antics. As has been well documented, the country’s President Olafur Grimsson has refused to sign the Bill detailing a payment schedule of £3.4bn owed to Britain and the Netherlands due to the collapse of Icesave. Instead, he has put it to a referendum. While Iceland’s political elite are keen to repay the money owed, the public are not so obliging. Firstly, they feel their money should not be used to cover the failings of a private bank, and many are fuming at our government’s use of anti-terrorist legislation to freeze UK assets. The terms of the bill are also causing anger: representing over 40% of Iceland’s GDP, the money must be paid over 14 years at an interest rate of 5.5%.
Putting aside the rights and wrongs of this case, it is heartening to see the President recognizing that this debt will be paid for out of the pockets and hard work of the Icelandic people. Standing at a debt of over £10,000 per person this is a large sum for current and future generations to be saddled with; and as such the public has been given a chance to voice their opinion. As Mr Grimsson explained on Newsnight: “The difference between the British and Icelandic constitution is that in Britain parliament is sovereign. In Iceland, it is the nation and the will of the people that is sovereign.” Considering the way in which vast sums of taxpayer’s money has been thrown about on the say-so of an over-powerful executive, Iceland’s respect for the decision making ability of its people is in comparison refreshing.
Sadly, our government is (perhaps understandably) more interested in getting its hands on a few billion than taking lessons in democracy. Even though the proposed referendum is entirely constitutional by Icelandic law, the country is threatened with international isolation and having its chances of joining the EU dashed. Then again, perhaps for a country that values the sovereignty of its people this is no bad thing.