IMF Discussions to Be Based on Icelandic Strategy Skip to content

IMF Discussions to Be Based on Icelandic Strategy

Icelandic authorities are currently working on an economic strategy which they will submit to the International Monetary Fund (IMF) as the basis for further discussions regarding whether Iceland will request assistance from the fund or not.

According to Fréttabladid, Icelandic authorities plan to discuss with IMF representatives what kind of terms the fund is prepared to offer and then decide later this week whether they will request a loan from the fund.

“We expect the fund’s intervention to be of a different nature than it has been for the past decades,” Iceland’s Minister of Finance Árni M. Mathiesen said on the Stöd 2 news last night without explaining the matter in more detail.

Usually, financial aid granted by the IMF involves committees acting on its behalf taking over economic control in the recipient country. The fund usually does not grant loans except when strict conditions are agreed upon involving an extensive marketization of the infrastructure of the community in question, Fréttabladid reports.

An IMF delegation is currently in Iceland. Last summer the fund published a report on the Icelandic economy, recommending that the state-run Housing Financing Fund (HFF) be privatized, public expenses be reduced and that the Central Bank maintain its monetary policy.

The IMF is expected to review these recommendations, now that the Icelandic economy is facing a completely different reality than last summer.

A delegation from the international division of the Central Bank of Iceland flew to Moscow yesterday to discuss a potential EUR 4 billion (USD 5 billion) loan with Russian authorities.

Click here to read more about a potential loan from the IMF.

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