So, the International Monetary Fund has decided to relax its stringent stance against Iceland and go ahead with the review of Iceland’s economic program. This is the prerequisite to Iceland receiving more aid from the IMF and also from other European countries [although Norway broke ranks a few weeks ago, as some of you may remember – and of course our sweet cousins the Faroese imposed no such conditions]. This review has been up in the air for several weeks, pending the resolution of the Icesave issue.
Put another way, this was what some people viewed as bullying by the IMF because their British and Dutch members refused to approve aid to Iceland unless Iceland agreed to their terms.
Of course we all know what happened next, i.e. those terms were voted down in the Icesave referendum, and many Icelanders were all about giving the IMF the finger and just going back to the turf huts and living on ram’s testicles and sheeps’ heads.
But anyway, like I said, the IMF has now decided to keep loaning money to Iceland, and in return Icelandic officials had to sign some rather nebulous statement saying they would try to resolve the Icesave debacle as soon as possible.
Meanwhile, there’s been some discussion around here as to whether we really need to be accepting the IMF loans. Presumably we’ll need some aid next year when the State Treasury has to pay off some hefty state loans, but until then it would be completely nonsensical to be accepting any sort of money just to have it sitting in a bank account somewhere – because obviously the interest payments are not exactly lightweight. So it seems it’s more about having credit lines open — at least I hope officials around here have enough sense to exercise prudence in these matters.