Now that Icelandic president Ólafur Ragnar Grímsson has rejected the Icesave bill, refering it instead to national referendum, what happens next?
The president’s veto power is covered in Article 26 of the Icelandic constitution. The article in full states:
“If Althingi has passed a bill, it shall be submitted to the President of the Republic for confirmation not later than two weeks after it has been passed. Such confirmation gives it the force of law. If the President rejects a bill, it shall nevertheless become valid but shall, as soon as circumstances permit, be submitted to a vote by secret ballot of all those eligible to vote, for approval or rejection. The law shall become void if rejected, but otherwise retains its force.”
What this means is that the Icesave bill is actual law, until such time as a national referendum is held which kills it by simple majority. This is how the government was able to promise the UK and Holland that it will still honor its financial obligations, despite the veto.
Björg Thorarensen, president of the law department at the University of Iceland, told Vísir that the process of referendum could cost about 200 million ISK (about 1.11 million euros, or about 1.6 million USD).
However, there is actually no law with regards to how a national referendum is held. And so first, parliament will have to create the rules and regulations of one.
There are currently two bills in parliament outlining such rules. Have in mind, though, that bills are seldom, if ever, submitted and then immediately voted upon. Rather, they usually go through committee and back to the floor of parliament at the most three times before a final vote is taken. For this reason, despite estimates that there could be a national referendum as soon as mid-February, there’s no telling when the referendum will take place.
In the meantime, two recent opinion polls showed about 70% of the nation against the current Icesave deal, so the government has its work cut out for it if it wants the referendum to end up in the law’s favor.