Iceland

Iceland got a $4.6 billion bailout from the International Monetary Fund and four Nordic countries to help resurrect the island's economy after the failure of its biggest banks and the collapse of its currency, Bloomberg reported today. The Washington-based IMF approved a $2.1 billion loan late yesterday. Finland, Sweden, Norway and Denmark will provide a further $2.5 billion, the Finnish Finance Ministry said in a statement today. Approval of the loan dragged out after Iceland was unable to reach agreement with U.K.

Iceland agreed that European regulations require it to guarantee accounts of hundreds of thousands of Britons and other foreigners who are frozen in the online arm of one of the nation's collapsed banks, the government said Sunday. Recognition of the legal principle, which came in talks with European Union representatives, is a significant step toward freeing up a $2.1 billion bailout package from the International Monetary Fund, the Wall Street Journal reported today.

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.

An international bail-out of crisis-hit Iceland appeared to be unravelling on Tuesday night as the International Monetary Fund withheld official backing for the $6 billion plan, the Financial Times reported yesterday. Iceland has also been left with a $500 million shortfall in the funds for the plan that it had hoped to raise from other international donors.

Iceland began the early stages of figuring out how to restructure its banks' enormous foreign debts as its economy descends into what its central bank warned Thursday would be a "severe recession," the Wall Street Journal reported today. The IMF board is expected to consider a proposed $2.1 billion loan to Iceland on Friday, part of an effort to shore up several countries caught off guard as liquidity froze amid the financial crisis.

Officials from four Nordic central banks and finance ministries held a private meeting in Stockholm on Wednesday to discuss their contributions to a $6 billion rescue package for Iceland, the Financial Times reported. The gathering was a strong sign that Denmark, Sweden and Finland are drawing closer to announcing a multibillion euro package of loans after Norway agreed a €500m ($648m, £405m) advance last week. The four Nordic nations have said they are willing to support Iceland but only after it agreed to design and implement an economic stabilisation plan in association with the IMF.