Near-bankrupt Iceland’s €4bn ($5.43bn) loan from Russia is still not a done deal. Iceland’s central bank Governor David Oddsson says that talks are still “ongoing” but that any aid from Russia would be “very much welcomed.”
You can understand why Iceland is desperate for a massive euro-injection in the current bank crisis: the Sedlabanki, the central bank in Reykjavik, urgently needs euros because it has only €4.5bn in its current reserves and the country’s banking system needs to refinance about €10bn before year end — not easy when the Icelandic krona has fallen 40 per cent against the Euro currency so far this year.
But what price will the Russians demand for their bailout? A highly-placed source in Reykjavik tells Coffee House that Iceland might look kindly on requests from Russia’s military to use America’s former military base in Iceland.
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