Iceland agrees to repay lost billions

Politicians in Iceland have defied protesters and backed a scheme to repay billions of euros lost by foreign savers when the island’s banking system collapsed.

The contentious bill has struggled at every turn, but finally gained parliamentary approval. It strengthens Iceland’s hopes of rebuilding its shattered economy, and early membership of the EU.

“It is no pleasure for us to have to take on this responsibility and this economic burden, but we have to live with that,” said Finance Minister Steingrimur Sigfusson. “It is important for Iceland to find a solution and move forward.”

The bailout is deeply unpopular with many Icelanders, who resent having to foot the bill for mistakes made by the banks. When the Icesave scheme collapsed, Reykjavik was forced to beg for an International Monetary Fund aid package worth about seven billion euros. Critics say the debt will be a drain on Iceland for generations.