Faroe Islands Grant Loan to Iceland Skip to content

Faroe Islands Grant Loan to Iceland

The Faroese local government has agreed to grant Iceland a DKK 300 million (USD 53 million, EUR 40 million) loan in light of the current economic crisis. The country’s six political parties were all in agreement of the loan granting.

The Faroe Islands, which have a population of less than 50,000, represent an autonomous province under Danish rule and are one of Iceland’s closest neighbors.

From Kvivik in the Faroe Islands. Photo by Haraldur Stefánsson. Copyright: IPA.

Faroese Prime Minister Kaj Leo Johannesen told Fréttabladid that his countrymen feel sorry for their close Icelandic friends but emphasized that they are granting a loan but not a donation.

“Both the Faroese and Icelanders are proud nations,” Johannesen said. “We experienced similar difficulties in 1992 but were stronger once we emerged from them. I know that Iceland will do the same. I am certain that I speak for every Faroese when I say that this loan granting was the only right thing to do.”

Johannesen expressed his surprise to the reaction by British authorities of the collapse of Icelandic banks. “It is incredibly unjust to invoke anti-terrorism legislation against a peace-loving nation that hasn’t killed anything but fish.”

Jóannes Eidesgaard, the Faroese Minister of Finance, agrees. “We know what it is like not having credibility anywhere during difficult times and not being able to receive loans,” he said, adding that he is certain Iceland would do the same for the Faroe Islands.

Eidesgaard said Iceland does not have to pay interest rates while paying back the DKK 300 million loan.

Pétur Blöndal, chairman of the economic committee of Iceland’s Althingi parliament said the loan was extremely high relative to the miniscule Faroese population. He said he did not expect any other nation to grant Iceland a loan with the same per capita ratio.

The Faroese nation has shown time and time again that they are true friends of Iceland.

When two villages in Iceland’s West Fjords were hit by avalanches in 1995 and dozens of people lost their lives, the Faroese collected more money per capita than Icelanders did themselves, which among other things covered the construction of two kindergartens.

After the volcanic eruption in the Westman Islands in 1973, the Faroese donated a large sum of money to Iceland, used to construct new homes across the Icelandic mainland for islanders who had lost everything in the eruption.

In light of these repeated acts of goodwill towards the Icelandic nation, Bifröst University has decided to give two Faroese students the opportunity to study at the university for free as of next term, skessuhorn.is reports.

Emails from grateful Icelanders have flooded the inbox of Faroese newspaper Dimmalaetting and some of these emails have been posted on the newspaper’s online edition.

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