IMF Delays Decision on Loan for Iceland Skip to content

IMF Delays Decision on Loan for Iceland

By Iceland Review

The board of the International Monetary Fund (IMF) has postponed their decision until Monday on a USD 2 billion (EUR 1.6 billion) loan to Iceland as part of an economic stabilization program. This is the second time that the IMF board has delayed its decision on Iceland.

Iceland’s Prime Minister Geir H. Haarde revealed the news of the postponement to the Althingi parliament yesterday, reports.

Allegedly, the IMF delayed its decision on a loan to Iceland because of the dispute between Icelandic authorities and British and Dutch authorities over deposit accounts operated by Icelandic banks in these countries.

However, as Iceland’s Prime Minister Geir H. Haarde told Fréttabladid, the IMF is waiting for confirmation of loans from the remaining Nordic countries. Norway and the Faroe Islands have already confirmed a loan to Iceland.

“The reason for the fund’s delay is that we haven’t completed the additional funding that has to be completed. We are first and foremost talking about funding from the Nordic countries, either in the form of loans or currency swap agreements,” Haarde stated.

On the other hand, Mathias Persson, an executive at the Swedish Central Bank, told the Dow Jones news agency that a decision on a co-Nordic financial assistance for Iceland will not be made until the IMF board reaches its decision.

Iceland’s prime minister dismisses concern that the IMF board will reject Iceland’s request of financial assistance. “I trust that the loan will be granted and the fund’s managing director, Dominique Strauss-Kahn, told me during a telephone conversation this week that he saw no fault in this matter.”

Ólafur Darri Andrason, economist at the Icelandic Confederation of Labor (ASÍ), told Fréttabladid that the IMF-led loan is key to reconstructing Iceland’s economy and without it the deep depression which the nation is facing would grow even deeper.

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