Iceland and the International Monetary Fund Intent. The conditionalities include details of Banking Sector restructuring, changes to Fiscal Policy including government austerity and changes to exchange rate policies. Following the global financial crisis in 2007-2008 Iceland's banking sector collapsed leading to wide ranging unemployment and a lessening of support for the Icelandic currency - the Icelandic Krona ISK. This was triggered by an insolvency of the private banking sector. The largest Icelandic banks had liabilities in excess of 80 percent of GDP . Iceland requested assistance from the IMF and from its Nordic partners in the Nordic Council. The goal of Iceland in this market intervention
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