Reply #7: it's not about that.

[Hannah Bell]

A bill to return the deposits was passed by the Althingi – the world’s oldest legislature – in a knife-edge vote this week after months of wrangling, but a lack of legal clarity over responsibility continues to dog the issue and Iceland’s taxpayers are seething at the Carthaginian terms...

President Olafur Ragnar Grimsson said he will take into account a petition calling for the deal to be scrapped. A campaign led by InDefence, a grass-roots activist group, has secured almost 50,000 signatures, nearly a quarter of all adults.

The British-Dutch loan charges an interest rate of 5.5pc, deemed unpayable by critics. It raises Iceland’s public debt by 40 percentage points of GDP, pushing the total to 130pc.

The free-market government responsible for letting Iceland’s bankers run amok was forced out of power a year ago. The current Left-leaning coalition has reluctantly backed the deal as the only way for Iceland to move beyond the disastrous episode and rebuild its battered economy, but is bitterly disappointed that it could not secure gentler terms.

A report by Sweden’s Riksbank said EU rules covering Icesave were incoherent and that it was unclear whether Icelandic citizens bear the full responsiblity. It said Britain’s authorities had acted incompetently and should share some of the compensation costs.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6921818/Icelandic-revolt-upsets-Icesave-deal.html