Iceland and the International Monetary Fund set at positive 2-3 percent by 2010. Additionally Iceland determined that it would not support the losses of its pension funds and social service programmes in order not to take up additional obligations. One of the primary objectives of the Icelandic government in seeking an IMF programme was to stabilize the ISK and to set a path for its gradual appreciation. To stabilize short term pressures on the ISK the Central Bank of Iceland raised interest rates to 18% and prepared to back the krona with its foreign reserves, specifically for which Iceland asked for an IMF programme . The
Iceland in the Cold War a US military base in Iceland. One US official proposed that the US fund pro-Western political parties in Iceland.The US Ambassador to Iceland decided against this because the political risks were too high. If the operation had been exposed, the prospects for a military base in Iceland would have been low, owing to, what the Ambassador described as, the fierce nationalism, independence and sensitivity of the Icelanders. The Ambassador noted that it was safer not to deceive the Icelanders, but to engage with the Icelanders above the board and trust that they would continue to lean westward. In case of