Icelanders refuse to pay the bankers’ tab

( FOR THE second time in two years, the people of Iceland have voted in a referendum against the repayment of Icelandic banks’ supposed debt to Britain and the Netherlands.

In response, the British and Dutch governments are preparing to sue the Republic of Iceland for the sum of 4 billion euros in an effort to win back money lost by their own citizens in failed Icelandic banks during the financial crash of 2008. But having failed in the court of public opinion, Britain and the Netherlands now intend to move into a regular courtroom, where judgments and the will of the people share a less cozy relationship.

Iceland’s Social Democratic prime minister, Jóhanna Sigurdardóttir, has lamented the popular rejection of the government repayments, calling it the “worst option.” She predicts a stormy future for the nation’s economy.

Yet the debt itself is not rightly the people’s debt to repay. It’s the direct result of reckless practices by Icelandic banks, which offered tax breaks and other incentives to pull in huge investments from all over the world, but especially from Western Europe. But the Icelandic people know that all too well–which is why they’ve twice voted against covering the banks’ debts. Read more:

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