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    Iceland says IMF cash not enough to stabilise economy

    27.10.2008 - 15:07 | Son Güncelleme:

    Iceland said on Monday that International Monetary Fund (IMF) cash would not be enough to stabilise its ailing economy as it prepared for talks on the financial crisis with its Nordic neighbours.

    Crisis-struck Iceland called on the IMF for $2 billion in aid on Friday, and the Washington-based lender said an agreement had been reached on an economic programme that would be supported by the financial assistance.

    The deal still needs IMF board approval, but Prime Minister Geir Haarde told Finnish daily Helsingin Sanomat the funds were only about one third of what Iceland needs to fix a broken banking system, restart currency trading and soften the economic downturn.

    "It's hard to give an exact figure, but the situation would be good if we would get $4 billion more," Haarde was quoted as saying.

    Icelandic Commerce Minister Bjorgvin Sigurdsson, in Helsinki for the annual Nordic Council summit, told a news conference that some countries have signalled they would also help.

    "Other nations have told us that when we have concluded the IMF request for assistance then they will be glad to take up discussions ... to help us out of this crisis," Sigurdsson said, without naming countries.

    He said Iceland would have talks with Norway and Sweden in the coming days, but did not specify what was to be discussed.

    Sigurdsson also said it was time for Iceland to discuss membership in the European Union. His Social Democrats are the country's only major party advocating membership in the bloc.

    "The times have changed and we will have to go through these things (discussions) all over again in the light of these new consequences of the financial crisis and the weakness of the krona," Sigurdsson said.

    "There is growing pressure on the political parties to reconsider their position," he said. A poll in Icelandic daily Morgunbladid showed a surge in support for adopting the euro and entering the EU to 70 percent of those questioned.

    Iceland has not applied to the EU as there are fears it would have to open its waters to fishing boats from other countries, hurting its fisheries.

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