Iceland asks IMF for funds to stem financial crisis

REYKJAVIK, October 24, 2008 (AFP) – Iceland asked the International Monetary Fund to help it overcome a crippling banking crisis with a loan of two billion dollars (1.58 billion euros), its government said on Friday. “The Icelandic Government has reached an agreement… with a mission from the International Monetary Fund (IMF) on a comprehensive stabilisation programme,” a government statement said.

“The mission will now return to Washington to get approval of this programme from the IMF management. We are confident that the IMF management will support the programme and submit it for approval by the IMF executive board as soon as possible.”

The IMF confirmed the agreement and put the exact dollar figure at 2.1 billion. Under the terms of the agreement Iceland would be able to draw 830 million dollars immediately after board approval.

The head of the IMF mission here, Paul Thomsen, told reporters that Iceland could get a further four billion dollars from other countries as part of a package spread over two years which would therefore total six billion dollars.

He did not name the countries. A source close to the matter told AFP that a US delegation had arrived in Iceland and a Norwegian delegation h