Trapped Under Ice

The Humpty Dumpty fall of Iceland, which has been hit like no other nation by the credit crisis, is continuing with an IMF rescue.

The IMF may provide about $1 billion in emergency cash for Iceland with the balance lent by Norway, Sweden and Denmark and additional money possibly coming from Russia and Japan. Iceland, which has the same population as Coventry, had hoped that a bigger loan from Russia would save it from the humiliation and financial strictures of an IMF bailout.

Bjorgvin Sigurdsson, the Icelandic Banking and Commerce Minister, told The Times last night: "The talks with the IMF have progressed so that we are now at a stage where conditions, pros and cons are being looked over."

Economists gave warning that $6 billion would not be sufficient to refloat Iceland's devastated banking system because the Government needs so much foreign currency to buy basic supplies for Icelanders.

Anne Applebaum has a suitably panicky column about all of this, pinning some of the blame for Iceland's crisis on unsourced speculation (that got back to Iceland) about the country's wealth getting out of dodge.