Icelanders Reject Massive Bank Bailout Debt

Icelanders have expressed their outrage at being asked, because of the collapse of their financial system, to take on debts adding up to 45% of last year’s economic output. A whopping 93% of voters rejected IMF loans that would have saddled each of Iceland's 320,000 citizens with $16,400 of debt to pay off losses in the UK and the Netherlands caused by defaults of Iceland's three biggest banks. The hugely unpopular "Icesave Bill" passed 30-33 by Parliament approved $5.3 billion in loans, but President Olafur Grimsson blocked it and the referendum followed.

Icelanders, the world’s fifth-richest people per capita as recently as 2007, ended 2009 18% poorer and will see their disposable incomes decline a further 10% this year, the central bank estimates. (More Iceland stories.)