At least one country is not worried about the current difficulties facing the European Union, and more specifically the Eurozone. Iceland, according to a news release from Reuters and featured in this article in today's New York Times, will be handing over one half of the $10 billion it is borrowing from the IMF to make nice with finance ministers from two other member states - the UK and Netherlands - hoping that this may assist in their efforts to put their troubles "behind them" and look forward to future prosperity within the EU
REYKJAVIK (Reuters) -- Iceland's Parliament approved an amended bill late Wednesday to repay more than $5 billion lost by savers in Britain and the Netherlands when the country's banks collapsed.
The passage of the legislation, by a 33-to-30 vote, bolsters Iceland's hopes of swift entry to the European Union and of getting its shattered economy back on track.
"Approving the bill is the better option and will avoid even more economic damage," Steingrimur Sigfusson, finance minister and leader of the Left-Green party, said during the debate. "History will show that we are doing the right thing."
Britain had no immediate comment, but the Dutch finance minister, Wouter Bos, welcomed the bill.
"It has not been an easy process but Iceland has taken its responsibility and that deserves a compliment," Mr. Bos said in a statement on Thursday.
The global financial crisis devastated Iceland's economy, bringing down its top banks, sending its currency tumbling and plunging the country into recession.
The economy is expected to contract more than 8 percent this year as the effects of last year's economic meltdown linger, with growth not predicted to return until 2011.
To cushion the worst of the fallout, Iceland has agreed to a $10 billion aid package from the International Monetary Fund and other lenders.
It is worth pondering whether the IMF was informed in disclosures made by the Icelandic government that $5 billion of its aid package would be used in such a fashion. The fact that the vote in the Icelandic parliament was so close and contentious suggests that it may not have been. Which raises some fanciful possibilities of what might happen should the Icelandic government need another round of financing and the IMF was not amused by this act of…
