In mid April, after long delays, the IMF board approved the disbursement of Iceland’s third loan instalment, amounting to $159 million, in mid April. The delays were caused by a dispute between Iceland and the UK and the Netherlands over compensation to British and Dutch account depositors in the collapsed Icelandic bank Icesave. The IMF had refused to complete the review because the European Union portion of the financing was being held up. Although no concrete agreement on the Icesave dispute has been made yet, Iceland is under increased pressure after the European Free Trade Association in a late May letter advised of the country’s legal obligation to insure a minimum deposit guarantee of €20,000 per saver. Meanwhile, worries remain over Iceland’s debt sustainability (see Update 71).
World Bank & IMF in the news
From South Africa to Tunisia, Libya and Egypt, the Bank and Fund have demonstrated they are not appropriate allies to address the scale of the crisis the world is facing, especially, given their record.