People with knowledge of the talks between Iceland and the IMF said the international organisation was expected to contribute just in excess of $1bn (€750m, £580m), with central banks from the Nordic region and Japan contributing the rest of the money.
The proposed IMF package represents a significant breakthrough for Iceland in its attempts to stabilise its economy. The small, North Atlantic country was finding difficulty in obtaining any significant international backing before it secured this “seal of approval” from the organisation, according to negotiators.
People close to the talks said the IMF had not attached any punitive conditions on Iceland as part of its rescue package. “It is not demanding any fundamental changes to the social infrastructure,” said one person. “They say they have learnt from South Korea and they don't want to exacerbate any sharp downturn.”