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The Russians are coming. Only this time they are invited and by Icelanders of all people.
Icelandic Prime Minister Geir Haarde confirmed Tuesday that indeed the NATO member state and staunch U.S. ally against the Soviet Union during the Cold War had asked for a $5.43 billion (4 billion euro) loan from its “new friend” Moscow and that it did so because it found no aid coming from its Western allies. Iceland’s economy has been devastated by the global credit crunch that destroyed its banking sector and currency. Icelandic banks have been either nationalized or propped up by the state, but the krona (Iceland’s currency) is falling precipitously. The Russian loan may have staved off a speculative run on the krona that ultimately saves the country from complete bankruptcy.
It was hard not to notice the bitter and wounded tone of Haarde, particularly when explaining why Reykjavik turned to Moscow for help in the face of rejection from his country’s equally financially stressed Western allies. That tone may soon be repeated by a number of countries as the financial crisis picks off the weakest and shakiest economies, a tone that will certainly be welcomed by the Kremlin looking to extend its influence globally.
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