Iceland asked the IMF to help it overcome a crippling banking crisis with a loan of US$2 billion, its government said on Friday.
“The Icelandic Government has reached an agreement ... with a mission from the International Monetary Fund on a comprehensive stabilization program,” a government statement said.
“The mission will now return to Washington to get approval of this program from the IMF management. We are confident that the IMF management will support the program and submit it for approval by the IMF executive board as soon as possible,” the statement said.
The IMF confirmed the agreement and put the exact figure at US$2.1 billion. Under the terms of the agreement Iceland would be able to draw US$830 million immediately after board approval.
PACKAGE
The head of the IMF mission here, Paul Thomsen, told reporters that Iceland could get a further US$4 billion from other countries as part of a package spread over two years which would therefore total US$6 billion.
He did not name the countries. A source close to the matter said that a US delegation had arrived in Iceland and a Norwegian delegation had recently left.
With backing from the board, Iceland would become the first Western country to receive such IMF support since Britain in 1976. The IMF was set up in the wake of World War II, with aims that included lending to countries in trouble.
“This program will enable us to secure funding and gain access to the necessary technical expertise required to stabilize the Icelandic krona and to provide support for the development of a healthier financial system,” Icelandic Prime Minister Geir Haarde said.
“As a result, Iceland will commit to a sustainable long-term economic policy and a plan for the recovery of the Icelandic economy,” Haarde said.
He said Iceland would be required to repay the IMF between 2012 and 2015.
CONFIDENCE
In Washington, IMF managing director Dominique Strauss-Kahn said the tentative agreement “aims to restore confidence” in the nation’s banking sector.
“Iceland has put together an ambitious economic program, which aims to restore confidence to the banking system,” Strauss-Kahn said in a statement.
It also aims to “stabilize the krona through strong macroeconomic policies and to help the country achieve medium-term fiscal consolidation following the collapse of its banking system,” he said.
“I believe these strong policies justify the high level of access to Fund resources ... and deserve the support of the international community,” he said.
Iceland’s once-booming financial sector has in recent weeks collapsed under the weight of the global financial crisis, with the government forced to take over the major banks for lack of liquidity as its krona nose-dived. The currency has lost more than half of its value since January.
Thomsen estimated that its economy would contract by a massive 10 percent next year.
Iceland nationalized its three biggest banks — Kaupthing, Landsbanki and Glitnir — following the collapse, which stemmed from a US mortgage crisis and the failure of major US financial institutions.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last