Why are the Icelandic people obliged to pay for the Icelandic bank's failure?

It‘s a complicated matter, but I‘ll try to explain the main points of it briefly:

When the Icelandic banks collapsed, the governments of the UK and the Netherlands decided to reimburse all the deposits to people who had accounts in an Icelandic bank in the UK and the Netherlands.They then insisted that the Icelandic government (and essentially Icelandic tax payers) should repay them the money, with interests. The governments of the UK and the Netherlands feel that it‘s Iceland‘s responsibility to reimburse the money lost in the Icelandic banks. Even though those were private banks, they claim that it was the responsibility of Iceland‘s government to insure deposits in those banks, including accounts in Icelandic banks in other countries. They consider the money they paid to people who had deposits in that bank to be a „loan“ to the Icelandic government that they expect the Icelandic government to pay it back.

However, there is a lot of legal doubt about whether the Icelandic government is legally obliged to repay that money in the first place. The UK and the Netherlands reimbursed amounts far beyond what the law says the insurance per account should be. The accounts were in the UK and the Netherlands and it‘s unclear which country was responsible for insuring those accounts. The insurance program that Iceland had in place to insure deposits in Icelandic banks went bankrupt when all the major banks in Iceland collapsed, and it‘s unclear whether it‘s the government‘s responsibility to pay beyond what the insurance program could pay, because the EFTA laws that were being followed were not made for situations like when a country‘s whole bank system collapses.

So there is a lot of legal doubts and different opinions on each side and it‘s unclear whether the claims of the UK and the Netherlands are legitimate. That‘s why Icelandic voters rejected the Icesave deal. We want to have it settled in court whether we have legal obligation to pay, and how much. We don‘t want to give in to threats and just pay whatever the UK and the Netherlands tell us to pay them. Unlike what some foreign media and politicians have said, we are not refusing to honor our legal obligations or refusing to pay any money back. Most of the money will most likely be paid back once the bank‘s bankrupcy has been settled and its properties sold. What we want to settle in court is whether Icelandic taxpayers are obliged to pay the balance that may be left after those properties have been sold.