Iceland president lashes out over stalled loans

Nov 12, 2008, 10:19 GMT

Reykjavik/Oslo - The president of Iceland has expressed anger and disappointment over the slow pace in securing emergency loans, reports said Wednesday.

Since traditional allies like the United States and Britain have failed to aid the cash-strapped North Atlantic nation, Iceland might have to 'look for new friends, President Olafur Ragnar Grimsson was quoted in a Norwegian diplomatic report obtained by the Norwegian Klassekampen newspaper.

Grimsson, who does not have formal powers, expressed his views at a recent luncheon for diplomats.

Iceland secured a tentative deal with the International Monetary Fund (IMF) for a 2.1-billion-dollar loan, but the IMF board has yet to approve it.

Reykjavik has indicated it needs 6 billion dollars, but Nordic neighbours and European countries have said they want the IMF approval in place first.

According to the account in Klassekampen, the president even offered Russia use of the former US military base Keflavik, a key NATO installation during the Cold War. The US pulled out of Kefalavik in 2006.

The Russian ambassador, who also was present at the luncheon, said Moscow had no need for the base, the report said.

Grimsson praised neighbours Norway and the Faroe Islands for offering assistance but was critical of Britain, Sweden and Denmark.

Britain and the Netherlands have been in talks with Iceland over how to cover deposits of British and Dutch savers holding deposits in the collapsed Icelandic internet bank Icesave.

Last month, Britain froze Icelandic bank assets in its territory because of a dispute over bank deposit guarantees.

Iceland in October also sent a delegation to Moscow to discuss a possible loan, and has also approached the European Commission that earlier this week said it was considering a 'small loan.'