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Amid Greek debt crisis, Iceland still recovering from its own collapse

While Greece battles its debt crisis, Iceland – where major banks collapsed in the wake of the global financial meltdown – is gearing up for a referendum on whether its taxpayers will shoulder the burden of paying back billions of dollars of debt.

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Looking on as Greeks took to the streets in recent days in protest at an economic crisis often blamed on powerful individuals and forces beyond the control of ordinary citizens, many Icelanders must have felt a sense of déjà-vu.

A little more than a year has passed since Iceland became the 2008 global financial meltdown’s worst casualty when all three of its major banks collapsed and the government was toppled.

While the spotlight this week fell on Athens, where the rulers of debt-stricken Greece are braced for a public backlash against severe spending cuts and hundreds of finance and customs ministry workers took the streets on Wednesday to protest budget cuts, those behind Iceland’s own citizen uprising against their country’s banking and political elites insist that anger is still bubbling away here.

“We are not asking for people to be executed but we want them to face the consequences for what they did,” says Hordur Torfason, a folk singer and key instigator of the "saucepan revolution" – so called because of the kitchen implements participants took along to bang outside Iceland’s parliament.

Sipping coffee in a bustling cafe yards from where he led the protests, Torfason indicates that the next spark for a resurgence in popular anger may be just weeks away.

In what could be a perfect political storm, an eagerly-awaited official report into Iceland’s "riches to rags" economic crisis will be published days before a referendum planned for March 6 on a hugely unpopular deal to pay billions of dollars to Britain and the Netherlands arising from the collapse of an Icelandic online bank.

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