Iceland demands aid review from IMF
By Gudjon Helgason and Sylvia Hui |
March 29, 2010, Monday
|
Print Edition
Print Edition
ICELAND'S prime minister has said she was pressing the International Monetary Fund to hasten a review to determine the next batch of bailout funding for the nation's struggling economy.
The IMF has been putting off a decision on whether to release the second tranche of its US$2.1 billion bailout funds since last year. Iceland is worried that the money could be held up until it settles wrangling with Britain and the Netherlands over a dispute about debt repayments, but the IMF has insisted this wasn't the case.
Prime Minister Johanna Sigurdardottir said last Friday she wrote to IMF Managing Director Dominique Strauss-Kahn to demand that a review on Iceland's economy take place as soon as possible.
"It is highly unusual that the Icesave dispute and the review of the IMF be tied together, and that two nations (the United Kingdom and the Netherlands) can prevent it from taking place," Sigurdardottir told national broadcaster RUV.
Iceland has not resolved a dispute with the two nations over the repayment of US$5.3 billion to the two countries to pay off debts spawned by the collapse of Icesave, an Icelandic Internet bank that collapsed during the international financial crisis.
Talks between the three sides broke down earlier this month, and Sigurdardottir said the British and Dutch governments have not answered calls for new negotiations on Icesave to commence.
The IMF has disbursed about US$1 billion to Iceland and said discussions on a second review are ongoing.
Although the IMF has never explicitly linked delivery of the funds to the reaching of an Icesave deal, it is committed to Iceland repaying its international debt - the months taken to reach the original Icesave deal were responsible for holding up the first tranche of IMF funds last year.
The IMF has been putting off a decision on whether to release the second tranche of its US$2.1 billion bailout funds since last year. Iceland is worried that the money could be held up until it settles wrangling with Britain and the Netherlands over a dispute about debt repayments, but the IMF has insisted this wasn't the case.
Prime Minister Johanna Sigurdardottir said last Friday she wrote to IMF Managing Director Dominique Strauss-Kahn to demand that a review on Iceland's economy take place as soon as possible.
"It is highly unusual that the Icesave dispute and the review of the IMF be tied together, and that two nations (the United Kingdom and the Netherlands) can prevent it from taking place," Sigurdardottir told national broadcaster RUV.
Iceland has not resolved a dispute with the two nations over the repayment of US$5.3 billion to the two countries to pay off debts spawned by the collapse of Icesave, an Icelandic Internet bank that collapsed during the international financial crisis.
Talks between the three sides broke down earlier this month, and Sigurdardottir said the British and Dutch governments have not answered calls for new negotiations on Icesave to commence.
The IMF has disbursed about US$1 billion to Iceland and said discussions on a second review are ongoing.
Although the IMF has never explicitly linked delivery of the funds to the reaching of an Icesave deal, it is committed to Iceland repaying its international debt - the months taken to reach the original Icesave deal were responsible for holding up the first tranche of IMF funds last year.
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