Iceland is bracing for a public backlash against the use of taxpayer money to pay its international debts — the latest stumbling block in the tiny island’s difficult struggle out of a deep recession.
Icelanders are expected to deliver a resounding “no” vote in a referendum Saturday on a $5.3-billion (U.S.) deal to compensate Britain and the Netherlands for deposits lost when Iceland’s banks collapsed at the height of the global financial crisis.
Locals largely view that deal both as bullying by bigger nations and an unfair result of their own government’s failure to curtail the excessive spending of a handful of bank executives that led the country into its current malaise.
A rising tide of anger, fueled by surging unemployment and soaring livings costs, pushed the Icelandic government into trying to agree to a new — more amenable — deal with its creditors.
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