Iceland To Turn To IMF For Bailout Money

Fri, 10 Oct 2008 10:19:08 +0000
AHN Staff

Washington, D.C. (AHN) - A mission from Iceland arrived in Washington Thursday to seek bailout money for the nation's financially hemorrhaging banks.

The arrival of the team followed a Wednesday statement from Iceland's Prime Minister Geir Haarde that a loan from the International Monetary Fund was being considered by the European nation after Russia turned down its request to borrow bailout funds.

Many from Iceland's academe are in favor of the nation seeking bailout money from IMF. University of Iceland professor Arsaell Valfells told the New York Times, "Iceland in bankrupt... The Icelandic krona is history. The only sensible option is for the IMF to come and rescue us."

In anticipation of the rush of borrowers, IMF managing director Dominique Strauss-Kahn said the fund has activated a rapid-fire emergency loan program which would lend trillions of dollars to emerging markets threatened by the global financial meltdown.

The ongoing global economic turmoil will bring back the prominence and importance of the IMF to the global economy. Over the past few years, IMF has been sidelined as a major source of funds as healthy capital markets and rising commodity prices gave many developing countries the opportunity to raise funds from within and in the process build up their currency reserves.

Prior to the global credit crisis, "The IMF had been written off as increasingly irrelevant," Inter-American Dialogue scholar Claudio Loser told Bloomberg. He added, "Now we could see a renaissance at the fund. Countries that had hoped never to need the fund again may be forced to ask for help as the normal sources of finance dry up."

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