Icelanders reject plans to repay debt of €3.9 billion to Britain and Netherlands

With about 98 percent of the votes counted Sunday, more than 93% of Icelanders voted no, according to preliminary figures published Sunday morning by state broadcaster RUV. Less than 2 percent voted yes, and the rest of the votes were invalid.

According to the deal, approved by Iceland's Parliament last December, the country would pay back the money over 15 years, but wouldn't have to make payments for the first seven. The bill was eventually vetoed by the Iceland's president, Ólafur Ragnar Grímsson. He explained his veto with mass public dissatisfaction, which led to the referendum.

In late 2008, Iceland's all major banks collapsed, including Landsbanki hf, which had taken deposits over the Internet in the U.K. and the Netherlands through Icesave. The island's deposit-insurance scheme couldn't pay the claims of British and Dutch savers, so their governments stepped in to help out, asked Iceland to pay their money back.

In total, €3.9 billion must be repaid. In addition, the plan voted on Saturday called for a 5.55% interest rate during the course of the 15-year payback.