Nordic countries agree to $2.5 billion long-term loan for crisis-hit Iceland
By APWednesday, July 1, 2009
Nordic countries come to Iceland’s rescue
LONDON — Denmark, Finland, Sweden and Norway signed loan agreements with Iceland on Wednesday that will provide the struggling nation with $2.5 billion (euro1.8 billion) over the long term.
Iceland’s central bank, Sedlabanki, said the money will be used to strengthen the country’s foreign exchange reserves.
The funding will be granted in four equal installments, with each dependent on a positive review of progress made by Iceland on a program set out by the International Monetary Fund.
The Nordic countries had previously pledged the funds as part of a $10 billion IMF-led bailout package after Iceland’s banking system collapsed in October. Wednesday’s announcement finalizes the size and terms of the loans.
Sedlabanki said the loans, with a maturity of 12 years, will provide Iceland with important long-term financial support. It added that the country’s fiscal consolidation program and measures for restructuring the banking sector in a fair and equitable way are important elements for the loan program.
