Details are emerging that the anticipated Norwegian loan to Iceland will take place.
Norwegian Foreign Minister Jonas Gahr Store is in Reykjavik at the moment on an official visit. Following a meeting with Prime Minister Geir H. Haarde today, Store confirmed that a NOK 4 billion (USD 606 million) loan will be extended to Iceland.
The loan will have a maturity of up to five years and the existing currency exchange swap agreement will be extended to the end of 2009.
MBL.is also quotes Norwegian media as saying Norway has offered to mediate in the dispute between Iceland and the United Kingdom over repayments of British savers and the UK government’s controversial reaction to the Iceland crisis.
The news of the Norwegian loan comes after weeks of uncertainty over who will step in to save the Icelandic economy. Despite the IMF agreeing a loan of USD 2 billion, it still has not been officially approved by the board.
The Faroe Islands were the only country to have yet firmly granted Iceland a loan. Sources in Reykjavik hope the Norwegian loan will spur on negotiations with the other Nordic countries and Russia.
The already given 500 million Euro Credit will be extended for one year and there is given a new 500 million loan for 4-5 years – total is 1 billion Euro.
I certainly and happy to see someone stepping in to help. Iceland certainly did get caught in the middle of this Banking Crisis in the worst way. They should however be careful of the IMF they have a tendency to put certain stipulations on loans, that may be in Iceland’s best interests.
Change and change: Iceland needs M O N E Y. Since Norwegians are so rich, why do they offer so little to their brothers, the Icelanders? Some days ago, a Norwegian spoke about great wealth in Norway; if they are so rich, why so avaricious with their brothers?!!
By the way, Faroe Islans is not a country yet!
@Did you know,
IMF is not big bad wolf, IMF is a arrogant doctor trying to get patient in denial to swallow bitter medicine and stop deluding himself.
For example, IMF is not saying that people in iceland have to go bankrupt because of the loans, or the icelanders to eat grass and lie in poverty.
IMF for example wants that iceland floats the currency as soon as possible. And that is a bitter medicine. IMF knows that exchange rate manipulation is very popular sport with politicians, as in short term it can provide false sense that everything is ok and nothing painfull has happened – at least, until all foreign currency reserves are exhausted and country is in even bigger trouble.
In addition, floating exchange rate puts a watchdog on a country’s finances, in a way that every government stupidity that could be domestically covered up with artificially inflated exchange rate, resonates loudly in the form of dropping value of the domestic currency.
Of course, iceland government knows that their official exchange rate has the snowball’s chance in hell, and floating the currency will suddenly and dramatically expose the fact that iceland is bankrupt. Not “hey in the headlines say we are bankrupt” while casually sipping coffee, but “O MY GOD, IS THIS WHAT MY SALARY IS WORTH NOW?” bankrupt.
So they are trying to postpone the floating, and ofcourse, before IMF played a hardball, they even reduced interest rates in the face of roaring inflation (inflation is another populist trick which politicians use to convince people that “it is not that bad”, while robbing them of their savings).
Bottom line, it may sound as IMF demands exceedingly cruel stuff from countries, but it is only the reality that it is cruel, and IMF want people and politicians to stop deluding themselves.
from SPAIN
I don’t think lending a billion euros to a country with 300,000 people is avaricious. Especially since the Icelandic crisis does not stem from some sort of natural disaster, but is the result of senseless expansion/greed and uninhibited consumption based on – borrowed money…