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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: Peter Dierks who wrote (40198)	1/5/2010 10:18:28 AM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 71588

Iceland Bank Bill to Go to Referendum By REUTERS January 5, 2010 Filed at 6:51 a.m. ET nytimes.com REYKJAVIK (Reuters) - Iceland's president said on Tuesday he would not sign into law a bill to repay more than 3.1 billion pounds lost by savers in Britain and the Netherlands, creating fresh political turmoil for the crisis-hit country. President Olafur Grimsson's rejection of the bill is seen putting aid from international lenders, as well as aspirations to join the European Union, in serious jeopardy. Financial aid is vital for Iceland in the wake of its economic meltdown. KEY POINTS - Grimsson said it was up to the Icelandic people to settle the matter in a referendum - Nearly a quarter of the North Atlantic island nation's voters had asked him to refuse to sign the bill and force a referendum on the fiercely debated issue. - This is only the second time in Iceland's history that the president has not signed into law a bill approved by parliament. COMMENTARY RUUD SLOTBOOM, DUTCH FINANCE MINISTRY SPOKESMAN, "We are very disappointed about the decision. We expect on short notice reaction from the government of Iceland (on) what is going to happen now. We think Iceland has the obligation to pay so it's not acceptable for us that there is no solution for Icesave." LARS CHRISTENSEN, DANSKE BANK "I'm somewhat surprised he went along with his threat to do this." "You can't hold a referendum in three days and this issue is pressing. The IMF will have to put on hold payment of any future tranches of aid until we have a 'yes' vote." "The British and Dutch governments will do anything they can to hold the payout from the IMF. I think it will be very hard for the IMF to pay out without a 'yes' on the Icesave issue." "The situation for public finance worsens very significantly... It could be negative for rating agencies, either for the rating or the outlook." "Obviously this is a big big blow for the Icelandic government's efforts to come back into the global economy." "Furthermore the internal divisions we have in the Icelandic government will become more clear." "Obviously this is very bad news. In terms of monetary policy, no sort of further rate cuts are possible at least until this issue is resolved." PETTER SANDGREN, SEB "This is a big surprise ... it's very market negative." "The problem in the referendum will really be to explain this issue in a way that's easy to understand. It's quite a complex issue to have a referendum around." "I assume it would affect the IMF package." Copyright 2010 Reuters Ltd.