Brussels considering "small" loan to Iceland (Roundup)

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.