Brussels - The European Commission said Monday it was
considering lending a 'small' amount of money to cash-strapped
Iceland, but only after its government resolved its disputes with
European Union member states such as Britain.
'The commission plans to propose to the member states and the
European Parliament macro financial assistance in the form of loans,
supplementing a program by the International Monetary Fund (IMF),'
said Johannes Laitenberger, spokesman for the EU executive in
Brussels.
'However, this can only be done after Iceland and some EU member
states reach an agreement on bilateral issues related to the deposit
guarantee scheme and the protection of foreign depositors,'
Laitenberger said.
Moreover, because of the commission's limited resources in the
light of possible additional requests from other non-EU member states,
the commission's assistance would be 'small,' the spokesman said,
without disclosing the exact amount.
'It should be seen more as a political gesture,' he said.
Meanwhile, Iceland was waiting for the IMF board to approve a 2.1-
billion-dollar emergency loan package. A decision had been expected
Monday, but was delayed.
'I hope it will take place as soon as possible,' Prime Minister
Geir Haarde was quoted as telling the Morgunbladid newspaper.
Haarde said the IMF wanted more detailed information on Iceland's
accessibility for loans from other countries and agencies.
The premier said Reykjavik wanted to avoid linking the IMF loan to
an ongoing dispute with British and Dutch authorities over deposits in
collapsed commercial banks.
Last month, Britain froze Icelandic bank assets in its territory
because of a dispute over bank deposit guarantees.
In addition to the IMF loan, Iceland is seeking an additional 4
billion dollars from Scandinavian and European countries including
Britain and the Netherlands to counter a recession.
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