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| Europe |
| Iceland seeks Russian capital infusion |
| 2008-10-07 |
| Iceland expressed disappointment on Tuesday that western allies had failed to provide support to help ease the countryÂ’s financial crisis, forcing it to turn to Russia for a €4bn loan. “We have not received the kind of support that we were requesting from our friends,” said Geir Haarde, prime minister. “So in a situation like that one has to look for new friends.” In spite of the new friendship, Mr Haarde said it did not extend to military co-operation, refuting the suggestion that Russia might be given access to an airbase vacated by the US air force in 2006. “We are a founder member of Nato,” noted an official, “categorically denying” any such deal. There was confusion over the status of the Russian loan, with the central bank first saying it had secured €4bn ($5.4bn, £3bn) on a four-year deal, at between 30 and 50 basis points above the London interbank offered rate, before acknowledging that the pact had yet to be finalised. Alexei Kudrin, RussiaÂ’s finance minister, confirmed Russia had received a request from the Icelandic government for credit. “We will examine it,” he said. ”Iceland is well known as a country with tough budgetary discipline and a high rating of reliability. We see such an application Âpositively.” Iceland needs to bolster its foreign exchange reserves in an attempt to shore up the krona, whose depreciation has caused sharp price rises in imported goods such as fuel. The central bank said on Tuesday that it had begun intervening in currency markets to try to strengthen the krona, helping it to rise 13 per cent against the euro at IKr150. Mr Haarde refused to say which countries had refused to offer help. He said the Nordic central banks were the only ones to come forward before Russia; they agreed a €1.5bn facility in the spring but the Icelandic government decided it needed more funds to shore up the currency. “In a situation like this itÂ’s turning out that itÂ’s every man for himself, every country for itself, everybodyÂ’s taking care of their best interest and thatÂ’s what we are doing,” the prime minister added. Chris Weafer, chief strategist at Uralsib investment bank, said, “Lending money to Iceland is a very strong and clear statement from Russia that it is solvent and it has spare cash.” “This is going to make a big difference to the Icelandic economy and itÂ’s a very clear statement. It builds up political goodwill which could be helpful when it gets into difficult negotiations over territorial rights in the Arctic,” said Mr Weafer. Iceland is continuing to look abroad for other funds but, if finalised, the Russian package will almost double its foreign currency reserves. Mr Haarde said the funding would be used to support the krona but would not be extended to commercial banks. He said despite ratings downgrades and a near-record price to ensure government debt from default, there would be no such move from the country. “Iceland has never defaulted on its sovereign debt and will not,” said Mr Haarde. |
| Posted by:lotp |
| #11 Lest we fergit, ICELAND is the initial NORAM nodal point for a proposed OWG translantic supertransit system [Air, Surface, Undersea] bwtn EUROPE ["Eurozone"] + NORAM [US NE + Great Lakes OWG Free Trade Zone]. D *** NG IT, "ALL ROADS LEAD TO ROME, USSA" - you know, the Weak Anti-Sovereign OWG Global SSR = United Soc Republics [USR] of Amerika. * OIL STORM > RUSSIA IS RUSSIA, CHINA IS CHINA, etal. BUT ONLY AMERICA IS AMERIKA/USR!? |
| Posted by: JosephMendiola 2008-10-07 20:11 |
| #10 Lest we fergit, ICELAND is the initial NORAM nodal point for a proposed OWG translantic supertransit system [Air, Surface, Undersea] bwtn EUROPE ["Eurozone"] + NORAM [US NE + Great Lakes OWG Free Trade Zone]. D *** NG IT, "ALL ROADS LEAD TO ROME, USSA" - you know, the Weak Anti-Sovereign OWG Global SSR = United Soc Republics [USR] of Amerika. * OIL STORM > RUSSIA IS RUSSIA, CHINA IS CHINA, etal. BUY ONLY AMERICA IS AMERIKA/USR!? |
| Posted by: JosephMendiola 2008-10-07 20:11 |
| #9 HMMMMMM, must be a SAXE-VIKING RUS, RED BANNER NORHERN FLEET, MOTHERLY AIRBORNE thingy??? |
| Posted by: JosephMendiola 2008-10-07 19:58 |
| #8 If you could transport the energy off of Iceland it could be a major source of geothermal power. Maybe that's what their plans for the loan are . . . . A transicelandic pipeline. Yeah. |
| Posted by: General_Comment 2008-10-07 17:51 |
| #7 If you could transport the energy off of Iceland it could be a major source of geothermal power. |
| Posted by: Tranquil Mechanical Yeti 2008-10-07 17:42 |
| #6 I wish them well with it. There's always the possibility that Russia will treat them kindly. |
| Posted by: trailing wife 2008-10-07 17:37 |
| #5 The loan has already been approved. |
| Posted by: General_Comment 2008-10-07 17:16 |
| #4 sosus for sale? |
| Posted by: swksvolFF 2008-10-07 16:40 |
| #3 You know you're %#&@ed when you have to borrow from Russia. |
| Posted by: Spaish Flomble3461 2008-10-07 16:06 |
| #2 It's not a lot of money, but I understand the Russians are spending big sums of cash to prop up their domestic institutions. They may not want to use their spare cash to help out the Icelanders. |
| Posted by: Zhang Fei 2008-10-07 15:19 |
| #1 Does Russia have 4bn euros? |
| Posted by: bigjim-ky 2008-10-07 15:13 |