From what I've read in this thread from the thread originator, it doesn't look to me like Iceland was unwilling to pay the money back.

The thread originator has also said that Britain has declared war on Iceland, that Britain has threatened to bomb the Iceland embassy and that Britain has called the Iceland people terrorists.

He has said this based on what is being reported in Iceland. We have already come to the conclusion that a lot of what is being reported there is untrue.