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Iceland's President Irked by Hesitant Lending

The president of Iceland has expressed anger and disappointment over the slow pace in securing emergency loans after the country's financial sector collapsed under the weight of the global financial crisis.

Iceland's President Olafur Ragnar Grimsson, portrait

An irritated Grimsson is thinking about looking for new friends

Iceland's President Olaf Ragnar Grimsson has vowed his country would "look for new friends" since once traditional allies like the United States and Britain have failed to aid the cash-strapped North Atlantic nation, a Norwegian newspaper reported.

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

Iceland had previously secured a tentative deal with the International Monetary Fund for a $2.1 billion loan, but the IMF board has yet to approve it.

However, on Wednesday, Nov. 12, it looked as if that deal were in danger of unraveling.

On Tuesday, some two weeks after it initially struck the loan agreement, the IMF said it was waiting for a loan for the crisis-hit island to be "fully financed" before it could be submitted to the IMF executive board.

Offer for Moscow

The IMF's backpedaling now has put a $6 billion loan pact under threat. Iceland's Nordic neighbors and European countries have said they want IMF approval in place before they support such a package.

A man walks past a branch of Iceland's Kaupthing bank.

Kaupthing, Iceland's biggest bank, was taken over by the government

According to an account in Norway's Klassekampen, the Icelandic president's search for new friends included his offering Russia the 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.

At the luncheon, Grimsson praised neighbors Norway and the Faroe Islands for offering assistance, but he was critical of Britain, Sweden and Denmark.

Ongoing problems

Britain and the Netherlands have been in talks with Iceland over how to cover the money of British and Dutch savers with 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.

EU chief Jose Manuel Barroso has told Iceland that planned EU loans to help it out of its financial crisis are conditional. He said the country must resolve its disputes with EU countries over compensation for depositors that lost money in Icelandic banks.

Iceland's once booming financial sector has crumbled under the weight of the worldwide credit crunch, forcing the government last month to take control of major banks as its currency has nosedived.

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