Norway Confirms Loan to Iceland Skip to content

Norway Confirms Loan to Iceland

By Iceland Review

Norway’s Minister for Foreign Affairs Jonas Gahr Stoere arrived in Iceland yesterday, announcing a five-year loan of EUR 500 million (USD 641 million) to Iceland. Gahr Stoere emphasized Norway’s will to assist Iceland through the financial difficulties at hand.

Currency swap agreements between Iceland and Norway will be extended until the end of next year, Morgunbladid reports.

Gahr Stoere (left) and Haarde speak during a joint press conference. Copyright: Icelandic Photo Agency.

“It is an act of friendship on their behalf and shows how Norwegians feel about this,” Iceland’s Prime Minister Geir H. Haarde said in a joint press conference with Gahr Stoere, referring to the loan granting.

Haarde said the loan from Norway does not influence a potential loan from Russia. “It would possibly come in addition.”

Gahr Stoere said it is important that many countries participate in the International Monetary Fund (IMF) economic stabilization program for Iceland. “It is not of Norway’s concern whether Russia participates in such a program but I can’t see that there is a reason to warn against their participation in any way.”

Gahr Stoere said the IMF board should confirm the loan to Iceland as soon as possible because that would contribute to reestablishing the Icelandic króna as an operable currency in trade. “The IMF agreement increases the credibility of Iceland considerably and has made it easier for Norway to contribute.”

Norway’s foreign minister also said that his government had repeatedly emphasized that it is natural for Iceland’s other Nordic neighbors to participate in the IMF economic stabilization program for Iceland.

The Faroe Islands have already revealed their intentions to grant a loan to Iceland.

Haarde has requested loans from the other Nordic countries after the matter was discussed during a meeting between the Nordic prime ministers in Helsinki last week. “It is being considered in the other [Nordic] countries, but they haven’t given us any answers yet.”

With regards to the question of potential EU membership for Iceland, Gahr Stoere said Iceland’s decision would certainly be of importance to Norway. They are the only two Nordic countries to have remained outside the European Union but within the European Economic Area (EEA).

Gahr Stoere however emphasized that both states are independent and free to decide whatever they prefer in regards to EU membership. “Norway will therefore respect Iceland’s decision. We will follow the Icelandic EU discussions closely but Iceland’s decision has no automatic influence in Norway.”

Norway has voted for and rejected EU membership twice; when Denmark joined and again when Sweden and Finland joined.

Iceland’s Foreign Minister Ingibjörg Sólrún Gísladóttir has expressed her view that Iceland should join the EU while Prime Minister Geir H. Haarde is against EU membership.

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