IF you were an Icelandic citizen would you vote to pay the money back?
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The problem was it should never have been put to them, you can't expect the general public to have enough knowledge to make the 'best' decision, they're only going to make the decision that suits them individually the best.
TBH I don't really see why the Icelandic taxpayer should have to foot the bill for a privately held bank going under. I wouldn't expect to pay the debt from my taxes if Barclays went under.
The deal they rejected to start with was about 5 and half per cent - that was less then Ireland, for example, have to pay back their European bail out money.
The deal they rejected the second time was 3 and something per cent - obviously a lot better.
In the mean time all their international credit is costing the country more than it would be if they agreed to the repayment, and if they get forced to pay it back it could be at a higher rate than the first deal they rejected.
In the unlikely event that Iceland is found to not be legally liable for the money, then the country have only lost the extra amount that the more expensive credit costs. It's much more likely that they have that extra cost to pay, plus the extra cost of repayment at a higher rate of interest that the courts could make them pay. Overall the Icelandic people will almost certainly lose more money in the long term - all because they were given the choice.
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