Iceland cannot afford to wait much longer for the second tranche of loan funding from the IMF and its Nordic neighbours, Prime Minister Johanna Sigurdardottir told Bloomberg this week.
The next payment is long overdue waiting for the IMF review, which is itself being delayed until Iceland strikes a binding deal with the Netherlands and the UK over repayment of debt incurred by Landsbanki’s collapsed Icesave savings accounts.
“We are still hoping that the programme will be reviewed in October,” Sigurdardottir said. “However, it’s clear that the IMF wants to see a solution in the Icesave matter, prior to Iceland’s review with the fund.”
“Solving the Icesave matter under the conditions placed by parliament has proven to take longer, be more difficult and more elusive, than we anticipated,” the premier told Bloomberg. “We assume a formal answer from the Netherlands and the U.K. to the conditions and how we can uniformly move forward will arrive shortly.”
Sigurdardottir continued to say that the Icesave deal is so unpopular in Iceland becauase it is not viewed as fair; and that despite Iceland’s will to pay the compensation, she cannot put her support behind “a solution that forces hardship on Iceland and Icelanders.”
The IMF review was originally due in February.