There are many ways to decide whether to repay your debts but a national referendum is surely a first. That is what is going to happen in Iceland after its president refused to sign a bill paying €3.8 billion ($5.5 billion) to the British and Dutch governments over 15 years.rnGiven that a quarter of the Icelandic population has signed a petition opposing such payments, it is not difficult to imagine how such a poll will turn out. "Vote for lower incomes" is not going to be a very popular slogan. And the Icelanders will only be the first. Around the world governments have assumed the debts of their private sectors. That is an easy commitment to make in the short term. Paying the money back is another matter. If the debt is large enough, the result will be years of austerity. Electorates will choke at the cost.
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