Icelanders Protest Government Failure to Clinch Loan

Icelanders will take to the streets in the thousands tomorrow to protest the government's failure to clinch a $6 billion International Monetary Fund-led loan while countries in less dire economic straits jump the IMF queue, Bloomberg reported today. Weekly protests in downtown Reykjavik may swell to 20,000 soon, or 6 percent of the population, said Andres Magnusson, chief executive of the Icelandic Federation of Trade and Services. The Atlantic island, which had the fifth-highest per capita income in the world last year, needs the money to finance imports and revive the banking system. Central bank forecasts that the economy will contract 8.3 percent next year may prove optimistic if the loan isn't approved soon, said Lars Christensen, chief analyst at Danske Bank A/S in Copenhagen. Icelanders are shooting envious glances at Eastern Europe where Hungary and Ukraine received loans from the IMF within two weeks of asking. ``It's worrying enough that they're not getting the $6 billion they're talking about, but the fact they're not even getting the $2 billion is very worrying,'' Christensen said. ``It's amazing that Ukraine is able to get a $16 billion loan, one of the most corrupt countries in the world, and Iceland is not able to pull it off.'' While the IMF loans to Hungary and Ukraine make up less than 20 percent of those countries' gross domestic products, Iceland needs loans worth more than its entire GDP to repay debts built up through five years of economic boom. Read more.