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Iceland rejects bank payback plan Iceland rejects bank payback plan
(10 minutes later)
Voters in Iceland have overwhelmingly rejected proposals to pay the UK and the Netherlands in the wake of collapse of the Icesave bank.Voters in Iceland have overwhelmingly rejected proposals to pay the UK and the Netherlands in the wake of collapse of the Icesave bank.
With a third of results counted, 93% of voters said "No" in a referendum.With a third of results counted, 93% of voters said "No" in a referendum.
Iceland's prime minister says her government will remain in office and continue to seek a deal.Iceland's prime minister says her government will remain in office and continue to seek a deal.
The British and Dutch governments want reimbursement for the 3.8bn euros (£3.4bn; $5.2bn) they paid out in compensation to customers in 2008.The British and Dutch governments want reimbursement for the 3.8bn euros (£3.4bn; $5.2bn) they paid out in compensation to customers in 2008.
Talks between Iceland, the UK and the Netherlands three countries broke down on Friday without agreement.Talks between Iceland, the UK and the Netherlands three countries broke down on Friday without agreement.
But Prime Minister Johanna Sigurdardottir said even she would not vote in Saturday's poll as her government was seeking to continue the negotiations.But Prime Minister Johanna Sigurdardottir said even she would not vote in Saturday's poll as her government was seeking to continue the negotiations.
With a third of votes counted, 93% of Icelanders have voted "No", 2% back the deal, and the remaining votes are invalid.With a third of votes counted, 93% of Icelanders have voted "No", 2% back the deal, and the remaining votes are invalid.
Mrs Sigurdardottir said that her government would stay in office, despite the "No" results.Mrs Sigurdardottir said that her government would stay in office, despite the "No" results.
"This has no impact on the life of the government. We need to keep going and finish the (Icesave) debate. We have to get an agreement," she said. "This has no impact on the life of the government. We need to keep going and finish the debate. We have to get an agreement," she said.
During voting on Saturday, hundreds of protesters outside parliament in the capital Reykjavik banged pots and waved banners reading "Icesave No! No! No!".During voting on Saturday, hundreds of protesters outside parliament in the capital Reykjavik banged pots and waved banners reading "Icesave No! No! No!".
A "No" vote could put billions of dollars of loans from the International Monetary Fund and other countries at risk. As results came in, Foreign Minister Ossur Skarphethinsson said talks with the UK and the Netherlands would continue, adding that the referendum result was good for his government's position.
Finance Minister Steingrimur Sigfusson attempted to play down the significance of the referendum, called after President Olaf Ragnar Grimsson blocked the initial deal. "It certainly doesn't weaken our hand," Mr Skarphethinsson said.
"It's of utmost importance that we don't over-interpret whatever message comes out of this," he said.
"We want to be perfectly clear that a 'No' vote does not mean we are refusing to pay. We will honour our obligations. To maintain anything else is highly dangerous for the economy of this country."
Referendum defendedReferendum defended
The government had hoped to avoid the vote by agreeing a new repayment plan before the weekend.The government had hoped to avoid the vote by agreeing a new repayment plan before the weekend.
Icelanders say no to debt plans Icelandic voter: "I voted no of course"
Foreign Minister Ossur Skarphethinsson told Reuters news agency he expected a new Icesave deal "in the next weeks, perhaps sooner".Foreign Minister Ossur Skarphethinsson told Reuters news agency he expected a new Icesave deal "in the next weeks, perhaps sooner".
Britain and the Netherlands want the money as repayment for bailing out customers in the Icesave online bank, which folded in 2008 due to the global financial meltdown.Britain and the Netherlands want the money as repayment for bailing out customers in the Icesave online bank, which folded in 2008 due to the global financial meltdown.
President Grimsson rejected suggestions the vote was meaningless, telling the BBC that a strong "No" would strengthen his country's hand.President Grimsson rejected suggestions the vote was meaningless, telling the BBC that a strong "No" would strengthen his country's hand.
"It's not a pointless exercise because the referendum, according to our constitution, is on whether the deal which the British and the Dutch insisted on at the end of last year, should remain in force as a law in this country," he said."It's not a pointless exercise because the referendum, according to our constitution, is on whether the deal which the British and the Dutch insisted on at the end of last year, should remain in force as a law in this country," he said.
"It is encouraging that in the last few weeks the British and the Dutch have acknowledged that that deal, on which the referendum takes place, is an unfair deal and that is by itself a tremendous achievement by the referendum. So, after the vote today, which I believe will be a clear 'No' vote, we will be able to continue the negotiations." "It is encouraging that in the last few weeks the British and the Dutch have acknowledged that that deal, on which the referendum takes place, is an unfair deal and that is by itself a tremendous achievement by the referendum... we will be able to continue the negotiations."
Many Icelanders believe the plan should be rejected because they feel they are being penalised for the mistakes of the banking industry.Many Icelanders believe the plan should be rejected because they feel they are being penalised for the mistakes of the banking industry.
"I will vote 'No' simply because I disagree very strongly with us... having to shoulder this burden," Ingimar Gudmundsson, a lorry driver, told AFP news agency."I will vote 'No' simply because I disagree very strongly with us... having to shoulder this burden," Ingimar Gudmundsson, a lorry driver, told AFP news agency.
"We want to pay our debts but we want to do it without going bankrupt," Steinunn Ragnarsdottir, a pianist who voted in Reykjavik City Hall, told Reuters."We want to pay our debts but we want to do it without going bankrupt," Steinunn Ragnarsdottir, a pianist who voted in Reykjavik City Hall, told Reuters.
Britain accusedBritain accused
There is also anger against the UK for using anti-terrorist legislation to freeze Icesave assets in the country.There is also anger against the UK for using anti-terrorist legislation to freeze Icesave assets in the country.
Some 230,000 Icelanders were eligible to vote on SaturdaySome 230,000 Icelanders were eligible to vote on Saturday
Arni Gunnarsson, a former Icelandic MP, told the BBC News website: "We have not forgotten how Britain used battleships against Iceland during the cod wars.Arni Gunnarsson, a former Icelandic MP, told the BBC News website: "We have not forgotten how Britain used battleships against Iceland during the cod wars.
"We find this a very strange method of thanking the Icelandic people for sacrificing the lives of their seamen during World War II."We find this a very strange method of thanking the Icelandic people for sacrificing the lives of their seamen during World War II.
"The colonial attitude is still going strong. The UK should come to its senses.""The colonial attitude is still going strong. The UK should come to its senses."
The Reykjavik government approved the repayment plan last December but it was blocked by Mr Grimsson in January, which led to the referendum being called.The Reykjavik government approved the repayment plan last December but it was blocked by Mr Grimsson in January, which led to the referendum being called.