Iceland’s economic woes look set to continue as the crisis-hit North Atlantic island nation prepares to go to the polls for a referendum on the question of repaying its massive debt to Britain and the Netherlands.

Parliament had agreed repayment terms on the outstanding 3.9 billion euros. The island’s president refused to sign the legislation, triggering this referendum. Experts predict an overwhelming, ‘No’ vote.

“We already have a better offer on the table from the UK government, so there is absolutely no incentive for anyone to actually accept the previous agreement which this vote will be on, as we have a much better agreement on the table which the government has refused by itself,” explained political analyst Eirikur Bergmann

The “Icesave Bill”, so-called after one of the banks which collapsed as the credit crunch hit, is expected to cause ripples beyond the question of the repayment terms.

It could spark extended delays in foreign aid which is needed to resucitate the island’s economy and also clouds the country’s prospects of joining the European Union.

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