Question

Read the passages below to answer the questions that follow each passage.
What can the leader of a democratic country do when one quarter of its population presents a petition opposing repayment of foreign debt and backs it up with a mass protest outside his residence, with red torches firing up the snowy landscape? To stave off revolt and breakdown of order, the head of State has two options; repudiate the debt altogether to resore public faith in the government or buy time by resorting to constitutional technicalities.
Iceland's President, Olafur Grimsson, faced this dour choice on New Year's Eve in Reykjavik and picked the latter course because of tremendous parallel pressure from creditors like the UK and the Netherlands and capital markets. Instead of immediately signing the bill that would have repaid London and Amsterdam $5 billion or remouncing all liability, he announced a national referendum for a clear national verdict. The country's finance minister has expressed confidence that public opinion can be moulded fast in the run-up to the referendum, by appealing to the average Icelander 's identity of being "honest hard-working = people" who honour debts.
The two creditor nations, which are furious at the delays and setbacks to repayment, should be hopping for such an outcome because they themselves are cash-strapped and hurting from the aftermath of the financial crisis. The saga of Iceland's fall from the glorious perch of the Nordic Tiger into a supplicant that defaults on its debts is emblematic of the ripple effect of the financial collapse of late 2008. One of the first economies to fall into the red immediately after the Lehman Brothers bankruptcy, Iceland has risen since the mid-nineties on wave of excessive leverage facilitated by State deregulation. All three of its big banks- Glitnir, Kaupthing and Landsbanki-collapsed like dominoes in a single week of mayhem in October 2008.