Money Matters - Simplified

Petition halts Iceland's repayment plan

Reykjavik -- More than 56,000 voters in Iceland have signed a petition asking the government not to pay back foreign depositors who lost money when Icelandic banks failed.

The EUobserver reported Monday that the idea of paying back $5.5 billion to British and Dutch depositors had little public support given the sum -- $17,273 per person -- and the perception that bankers, not the man on the street, had caused the banking crisis.

On an island of 320,000 residents, those signing the petition represented almost a quarter of the country's voters, the EUobserver said.

Icelandic banks collapsed in October 2008 in the midst of a global financial crisis that brought down some of the world's largest banks. Last week, members of Iceland's parliament approved a law to have the money returned to foreign depositors, but President Olafur Ragnar Grimsson has refused to sign the bill into law.

Magnus Arni Skulason, who helped organize the petition drive, said interest payments on the banks' debt "is like running the National Health Service of Iceland for six months."

Copyright 2010 by United Press International.

No votes yet