Iceland Gets $11 Billion Bailout from Europe, IMF

The cornerstone of the rescue package is a $2.1 billion loan from the International Monetary Fund, a deal agreed late on Wednesday after weeks of delays due to wrangling between Iceland and some European nations.

That will be complemented by more than $3 billion in loans from Nordic countries, Russia and Poland as well as special financing arrangements of close to $5 billion or more by Britain, the Netherlands and Germany.

Lars Christensen, chief analyst at Danish bank Danske Bank, said the loan would fail to prevent the economy from contracting at least 10% next year and would heap around $11bn of debt on the shoulders of a population of 320,000 - $34,375 for each individual.

The IMF said it was able to offer aid following a $120bn boost to its funds from Japan this month, but it was understood that the global lender may need a further injection of funds if the number of countries seeking support continues to escalate.