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NY Times: Nordic Countries Add $2.5 Billion to Iceland’s Bailout
By DAVID JOLLY
Published: November 20, 2008
Iceland finally received international backing for its bailout plan on Thursday, while Turkey appeared to be heading for its own rescue package.
Nordic countries followed up a $2.1 billion loan to Iceland by the International Monetary Fund with another $2.5 billion.
The finance ministers of Denmark, Finland, Norway and Sweden said in a joint statement that the money would help Iceland stabilize its economy and exchange rate, and reduce its public debt over the medium term.
“The work with implementing the I.M.F. program will not be easy,” they said, “but given appropriate measures we believe that there is a good basis for rebalancing the economy.”
The monetary fund said late Wednesday that its board had approved the Icelandic deal, making $827 million immediately available. The rest of the loan will be paid in eight equal installments, subject to quarterly reviews. The fund said the loan would fill about 42 percent of Iceland’s 2008-2010 financing gap.
In Ankara, Turkey, a government official said the country was close to reaching a deal with the monetary fund, Bloomberg News reported. Bulent Gedikli, the economy chief for Prime Minister Recep Tayyip Erdogan, said the package would be worth $20 billion to $40 billion.
Dominique Strauss-Kahn, the monetary fund’s managing director, said Saturday that there was “some disagreement” on the size and terms of a bailout package, which would be Turkey’s fourth in 10 years. But he said he was confident that a deal would be reached quickly.
The increasing severity of the global credit and economic crises has put stress on many smaller and developing nations as capital flees to Japan, Europe and the United States.
In addition to Iceland, the monetary fund has recently announced bailout programs for Hungary, Pakistan and Ukraine, and created a credit line of as much as $100 billion for countries with liquidity shortages. Japan has pledged $100 billion to replenish the fund’s resources, and other governments are expected to follow suit.
The IMF has instituted a first-in, first-considered plan, where nations select numbers from a ticket machine as they arrive. Currently, they are serving number 7 (Turkey), and the machine is dispensing number 41 to the next client. Not all countries positions on the list are known, but Vietnam has revealed that it has number 12, Bangladesh is number 16, Kenya is number 23, South Africa holds number 31, and apparently Canada has taken a number "in case we need it", and is 39th on the list. Egypt has announced that they are holding number 26, but is willing to trade antiquities "of considerable value" for the ticket of anyone holding a number from 15 or less.
By DAVID JOLLY
Published: November 20, 2008
Iceland finally received international backing for its bailout plan on Thursday, while Turkey appeared to be heading for its own rescue package.
Nordic countries followed up a $2.1 billion loan to Iceland by the International Monetary Fund with another $2.5 billion.
The finance ministers of Denmark, Finland, Norway and Sweden said in a joint statement that the money would help Iceland stabilize its economy and exchange rate, and reduce its public debt over the medium term.
“The work with implementing the I.M.F. program will not be easy,” they said, “but given appropriate measures we believe that there is a good basis for rebalancing the economy.”
The monetary fund said late Wednesday that its board had approved the Icelandic deal, making $827 million immediately available. The rest of the loan will be paid in eight equal installments, subject to quarterly reviews. The fund said the loan would fill about 42 percent of Iceland’s 2008-2010 financing gap.
In Ankara, Turkey, a government official said the country was close to reaching a deal with the monetary fund, Bloomberg News reported. Bulent Gedikli, the economy chief for Prime Minister Recep Tayyip Erdogan, said the package would be worth $20 billion to $40 billion.
Dominique Strauss-Kahn, the monetary fund’s managing director, said Saturday that there was “some disagreement” on the size and terms of a bailout package, which would be Turkey’s fourth in 10 years. But he said he was confident that a deal would be reached quickly.
The increasing severity of the global credit and economic crises has put stress on many smaller and developing nations as capital flees to Japan, Europe and the United States.
In addition to Iceland, the monetary fund has recently announced bailout programs for Hungary, Pakistan and Ukraine, and created a credit line of as much as $100 billion for countries with liquidity shortages. Japan has pledged $100 billion to replenish the fund’s resources, and other governments are expected to follow suit.
The IMF has instituted a first-in, first-considered plan, where nations select numbers from a ticket machine as they arrive. Currently, they are serving number 7 (Turkey), and the machine is dispensing number 41 to the next client. Not all countries positions on the list are known, but Vietnam has revealed that it has number 12, Bangladesh is number 16, Kenya is number 23, South Africa holds number 31, and apparently Canada has taken a number "in case we need it", and is 39th on the list. Egypt has announced that they are holding number 26, but is willing to trade antiquities "of considerable value" for the ticket of anyone holding a number from 15 or less.
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