2008-10-23 23h00 :: afp :: British dispute delays Iceland deal with IMF: report

http://afp.google.com/article/ALeqM5gmPHpVT2VCxIQfCKpIRsgStct4yw

British dispute delays Iceland deal with IMF: report

British dispute delays Iceland deal with IMF: report
14 hours ago

REYKJAVIK (AFP) — Iceland's decision to seek a rescue loan from the International Monetary Fund has been delayed by failure to reach a deal with London over British savings frozen in an Icelandic bank, media reports said Thursday.

The IMF wants Iceland to resolve the dispute with Britain first in order to determine what Reykjavik's needs are, but talks with a British delegation currently in Iceland have advanced slowly.

"We have not accepted their legal arguments," Icelandic Prime Minister Geir Haarde told daily Frettabladid on Thursday.

On Wednesday, he told Icelandic National Radio RUV that "the IMF would like to see those matters solved before any further steps are taken."

Iceland's once booming financial sector has in recent weeks collapsed under the weight of the global financial crisis, with the government forced to take over the major banks for lack of liquidity as its krona nose-dived.

According to the Financial Times, Reykjavik is angling for a six-billion-dollar (4.5-billion-euro) rescue package footed by the IMF along with several central banks from the Nordic region and the Bank of Japan.

The Icelandic government said Tuesday it hoped to reach an agreement with the IMF within a day or two.

A British delegation is currently in Iceland to discuss Reykjavik's responsibility towards British clients of Icesave, a British subsidiary of Iceland's nationalised bank Landsbanki, whose savings have been frozen since early October.

The Financial Times has reported that Britain is planning to lend Iceland 3.0 billion pounds (five billion dollars, 3.8 billion euros) to repay British savers.

Haarde has said that an agreement with the IMF cannot be reached until a national economic forecast has been made, and one factor that would affect the forecast would be the effect of foreign loans.

Petur Bloendal, chairman of the Icelandic parliament's economic and taxation committee, told AFP however that he didn't believe the Icelandic parliament would approve the British loan.

He said that British and Dutch demands over Icesave accounts in the two countries were, per capita, three to four times higher than reparations Germany had to pay after World War I.

If Iceland does receive a loan from the IMF, it would be the first Western country to do so since 1976.




Tout se passe en Islande où une délégation UK bloque l'accord avec le FMI.