Page last updated at 11:30 GMT, Friday, 7 November 2008

IMF and Europe offer Iceland loan

A bank customer holds a handful of Icelandic crowns
Iceland's currency fell sharply when its banking system collapsed

Iceland is set to get a $6bn (3.8bn) loan from the International Monetary Fund and a group of European countries, Poland's finance ministry has said.

Iceland has tried to get loans from several sources, including Russia, after it was forced to take over three of its biggest banks in October.

So far Iceland has reached "tentative" agreement on a $2bn IMF loan, but it has said it needs an additional $4bn.

Poland's finance ministry said it would contribute $200m to the rescue fund.

"The International Monetary Fund, Scandinavian countries, Britain, the Netherlands and Poland are likely to take part in the consortium," the ministry said in a statement.

The statement doesn't specify which Scandinavian countries are going to participate in helping Iceland.

"The support for Iceland will have the character of a loan whose detailed conditions will be decided between Iceland and the International Monetary Fund," Poland's finance ministry said.



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