Cable Viewer

Currently released so far... 12648 / 251,287

### Browse latest releases

2010/11 2010/12 2011/01 2011/02 2011/03 2011/04 2011/05
2010/11/28 2010/11/29 2010/11/30
2010/12/01 2010/12/02 2010/12/03 2010/12/04 2010/12/05 2010/12/06 2010/12/07 2010/12/08 2010/12/09 2010/12/10 2010/12/11 2010/12/12 2010/12/13 2010/12/14 2010/12/15 2010/12/16 2010/12/17 2010/12/18 2010/12/19 2010/12/20 2010/12/21 2010/12/22 2010/12/23 2010/12/24 2010/12/25 2010/12/26 2010/12/27 2010/12/28 2010/12/29 2010/12/30
2011/01/01 2011/01/02 2011/01/04 2011/01/05 2011/01/07 2011/01/09 2011/01/10 2011/01/11 2011/01/12 2011/01/13 2011/01/14 2011/01/15 2011/01/16 2011/01/17 2011/01/18 2011/01/19 2011/01/20 2011/01/21 2011/01/22 2011/01/23 2011/01/24 2011/01/25 2011/01/26 2011/01/27 2011/01/28 2011/01/29 2011/01/30 2011/01/31
2011/02/01 2011/02/02 2011/02/03 2011/02/04 2011/02/05 2011/02/06 2011/02/07 2011/02/08 2011/02/09 2011/02/10 2011/02/11 2011/02/12 2011/02/13 2011/02/14 2011/02/15 2011/02/16 2011/02/17 2011/02/18 2011/02/19 2011/02/20 2011/02/21 2011/02/22 2011/02/23 2011/02/24 2011/02/25 2011/02/26 2011/02/27 2011/02/28
2011/03/01 2011/03/02 2011/03/03 2011/03/04 2011/03/05 2011/03/06 2011/03/07 2011/03/08 2011/03/09 2011/03/10 2011/03/11 2011/03/13 2011/03/14 2011/03/15 2011/03/16 2011/03/17 2011/03/18 2011/03/19 2011/03/20 2011/03/21 2011/03/22 2011/03/23 2011/03/24 2011/03/25 2011/03/26 2011/03/27 2011/03/28 2011/03/29 2011/03/30 2011/03/31
2011/04/01 2011/04/02 2011/04/03 2011/04/04 2011/04/05 2011/04/06 2011/04/07 2011/04/08 2011/04/09 2011/04/10 2011/04/11 2011/04/12 2011/04/13 2011/04/14 2011/04/15 2011/04/16 2011/04/17 2011/04/18 2011/04/19 2011/04/20 2011/04/21 2011/04/22 2011/04/23 2011/04/24 2011/04/25 2011/04/26 2011/04/27 2011/04/28 2011/04/29 2011/04/30
2011/05/01 2011/05/02 2011/05/03 2011/05/04 2011/05/05 2011/05/06 2011/05/07 2011/05/08 2011/05/09 2011/05/10 2011/05/11 2011/05/12 2011/05/13 2011/05/14 2011/05/15 2011/05/16 2011/05/17

### Browse by creation date

66 72 73 75 79 85 86 87 88 89 90 91 92 93 94 96 97 00 01 02 03 04 05 06 07 08 09 10
1966/12
1972/02 1972/08
1973/04
1975/03
1979/08
1985/03 1985/05 1985/06
1986/05
1987/06
1988/01 1988/03 1988/07
1989/12
1990/01 1990/07 1990/08 1990/10
1991/05
1992/01 1992/03 1992/06 1992/09 1992/12
1993/01 1993/10
1994/12
1996/11
1997/06 1997/12
2000/05 2000/06 2000/09 2000/11
2001/02 2001/03 2001/06 2001/07 2001/09 2001/10 2001/11
2002/01 2002/02 2002/03 2002/04 2002/07 2002/08 2002/09 2002/11 2002/12
2003/01 2003/02 2003/03 2003/04 2003/05 2003/06 2003/07 2003/08 2003/09 2003/10 2003/11 2003/12
2004/01 2004/02 2004/03 2004/04 2004/05 2004/06 2004/07 2004/08 2004/09 2004/10 2004/11 2004/12
2005/01 2005/02 2005/03 2005/04 2005/05 2005/06 2005/07 2005/08 2005/09 2005/10 2005/11 2005/12
2006/01 2006/02 2006/03 2006/04 2006/05 2006/06 2006/07 2006/08 2006/09 2006/10 2006/11 2006/12
2007/01 2007/02 2007/03 2007/04 2007/05 2007/06 2007/07 2007/08 2007/09 2007/10 2007/11 2007/12
2008/01 2008/02 2008/03 2008/04 2008/05 2008/06 2008/07 2008/08 2008/09 2008/10 2008/11 2008/12
2009/01 2009/02 2009/03 2009/04 2009/05 2009/06 2009/07 2009/08 2009/09 2009/10 2009/11 2009/12
2010/01 2010/02

### Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z
Embassy Athens Embassy Asuncion Embassy Astana Embassy Asmara Embassy Ashgabat Embassy Apia Embassy Ankara Embassy Amman Embassy Algiers Embassy Addis Ababa Embassy Accra Embassy Abuja Embassy Abu Dhabi Embassy Abidjan Consulate Auckland Consulate Amsterdam Consulate Adana American Institute Taiwan, Taipei
Embassy Bujumbura Embassy Buenos Aires Embassy Budapest Embassy Bucharest Embassy Brussels Embassy Bridgetown Embassy Bratislava Embassy Brasilia Embassy Bogota Embassy Bishkek Embassy Bern Embassy Berlin Embassy Belmopan Embassy Belgrade Embassy Beirut Embassy Beijing Embassy Banjul Embassy Bangkok Embassy Bandar Seri Begawan Embassy Bamako Embassy Baku Embassy Baghdad Consulate Barcelona
Embassy Copenhagen Embassy Conakry Embassy Colombo Embassy Chisinau Embassy Caracas Embassy Canberra Embassy Cairo Consulate Curacao Consulate Ciudad Juarez Consulate Chennai Consulate Casablanca Consulate Cape Town Consulate Calgary
Embassy Dushanbe Embassy Dublin Embassy Doha Embassy Djibouti Embassy Dili Embassy Dhaka Embassy Dar Es Salaam Embassy Damascus Embassy Dakar Consulate Dubai
Embassy Freetown Consulate Fukuoka
Embassy Guatemala Embassy Gaborone Consulate Guayaquil Consulate Guadalajara
Embassy Helsinki Embassy Harare Embassy Hanoi Consulate Ho Chi Minh City Consulate Hermosillo Consulate Hamilton Consulate Hamburg Consulate Halifax
Iran RPO Dubai Embassy Islamabad Consulate Istanbul
Embassy Jakarta Consulate Jerusalem Consulate Jeddah
Embassy Kyiv Embassy Kuwait Embassy Kuala Lumpur Embassy Kinshasa Embassy Kingston Embassy Kigali Embassy Khartoum Embassy Kathmandu Embassy Kampala Embassy Kabul Consulate Kolkata
Embassy Luxembourg Embassy Luanda Embassy London Embassy Ljubljana Embassy Lisbon Embassy Lima Embassy Lilongwe Embassy La Paz Consulate Lahore Consulate Lagos
Mission USOSCE Mission USNATO Mission UNESCO Embassy Muscat Embassy Moscow Embassy Montevideo Embassy Monrovia Embassy Minsk Embassy Mexico Embassy Mbabane Embassy Maputo Embassy Manila Embassy Manama Embassy Managua Embassy Malabo Embassy Madrid Consulate Munich Consulate Mumbai Consulate Montreal Consulate Monterrey Consulate Milan Consulate Melbourne
Embassy Nicosia Embassy Niamey Embassy New Delhi Embassy Ndjamena Embassy Nassau Embassy Nairobi Consulate Naples Consulate Naha
Embassy Ouagadougou Embassy Ottawa Embassy Oslo
Embassy Pristina Embassy Pretoria Embassy Prague Embassy Port Of Spain Embassy Port Louis Embassy Port Au Prince Embassy Phnom Penh Embassy Paris Embassy Paramaribo Embassy Panama Consulate Peshawar
Embassy Quito Consulate Quebec
REO Basrah Embassy Rome Embassy Riyadh Embassy Riga Embassy Reykjavik Embassy Rangoon Embassy Rabat Consulate Rio De Janeiro Consulate Recife
Secretary of State Embassy Suva Embassy Stockholm Embassy Sofia Embassy Skopje Embassy Singapore Embassy Seoul Embassy Sarajevo Embassy Santo Domingo Embassy Santiago Embassy Sanaa Embassy San Salvador Embassy San Jose Consulate Strasbourg Consulate St Petersburg Consulate Shenyang Consulate Shanghai Consulate Sapporo Consulate Sao Paulo
Embassy Tunis Embassy Tripoli Embassy Tokyo Embassy The Hague Embassy Tel Aviv Embassy Tehran Embassy Tegucigalpa Embassy Tbilisi Embassy Tashkent Embassy Tallinn Consulate Toronto Consulate Tijuana
USUN New York USEU Brussels US Office Almaty US Mission Geneva US Interests Section Havana US Delegation, Secretary UNVIE Embassy Ulaanbaatar
Embassy Vilnius Embassy Vienna Embassy Vatican Embassy Valletta Consulate Vladivostok Consulate Vancouver
Embassy Windhoek Embassy Wellington Embassy Warsaw
Embassy Yerevan Embassy Yaounde
Embassy Zagreb

### Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
AORC AF AU ASEC AMGT AS APER AR AG ARF AJ AA AINF APECO AODE ABLD AMG ATPDEA AE AEMR AMED AGAO AFIN AL ASUP ASECKFRDCVISKIRFPHUMSMIGEG AID ASCH AM AORL ASEAN APEC ADM AFSI AFSN ADCO ABUD AN AY AIT AGR ACOA ANET ASIG AMCHAMS AGMT AADP ADPM ATRN ALOW ACS APCS AFFAIRS ADANA AECL ACAO AORG AROC AO ACABQ AX AMEX AFGHANISTAN AZ AND ARM AQ ATFN AMBASSADOR ACBAQ AC AUC ASEX AER AVERY AGRICULTURE AFU
BR BTIO BY BO BA BU BL BN BM BF BEXP BK BG BB BTIU BBSR BRUSSELS BD BIDEN BE BH BILAT BC BX BT BP BMGT BWC
CS CA CH CD CO CE CU CVIS CASC CJAN CI CPAS CMGT CDG CIC CAC CBW CWC COUNTER CW CT CY CNARC CACM CG CB CM CV CIDA CLINTON CHR COE CR CIS CDC CONS CF CODEL COPUOS CIA CFED CARSON CL CROS CAPC CTR CACS CN CBSA CEUDA COM CONDOLEEZZA CICTE COUNTRY CBE CKGR CVR COUNTERTERRORISM CITEL CLEARANCE CARICOM CSW CITT CDB CJUS CTM CAN CLMT CBC
DA DEA DR DEAX DHS DAO DCM DJ DOD DOMESTIC DO DK DPRK DEPT DISENGAGEMENT DOE DTRA DS DEFENSE DE
EAID ECON EFIS ETRD EC ENRG EINV EFIN EAGR ETTC ECPS EINT ES EIND EAIR EU EUN EG EPET ELAB EWWT EMIN ECIN ESA ER ETRDEINVECINPGOVCS EAIG ET ETRO ELTN EI EN EUR EK EUMEM EPA ENGR EXTERNAL EUREM ELN EUC ENERG ENIV EZ ERD EFTA ETRC ETRN EINVECONSENVCSJA EEPET EUNCH ESENV ENNP ENVI ETRDECONWTOCS ECINECONCS EFINECONCS ELECTIONS ENVR EXIM ERNG ECA EINVEFIN ETC EAP ECONOMY EINN ECONOMIC EXBS ECUN ENGY ECONOMICS EIAR EINDETRD ECONEFIN EURN EDU ETRDEINVTINTCS ECIP EFIM EAIDS EREL EINVETC ECONCS ETRA
FI FJ FR FDA FBI FTAA FAC FARC FTA FAO FMLN FO FAS FOREIGN FM FREEDOM FISO FOR FINR FINANCE FOI
GG GM GOI GT GR GH GTIP GV GA GAERC GE GCC GOV GZ GY GANGS GERARD GTMO GL GF GAZA GLOBAL
HR HA HU HO HURI HILLARY HYMPSK HSTC HK HEBRON HUMOR HI HUMAN
IC IV IAEA IR IO IT IN IS IZ IMO IPR IWC ICAO ILO ID ICTY ICJ INMARSAT INDO IL IMF IRS IQ IA ICRC IDA IAHRC IBRD ISLAMISTS IGAD ILC ITU ITF INRA INRO IDP ICTR IEFIN IRC ITRA ITALY INRB INTELSAT IBET IRAQI ISRAELI IIP ITPGOV ITALIAN INTERNAL INTERPOL IEA INR IZPREL IRAJ IF ITPHUM ISRAEL IACI
JA JO JM JOSEPH JP JUS JOHNNIE JOHN JAMES
KBTR KPAO KOMC KCRM KDEM KHIV KBIO KTIA KMDR KNNP KSCA KTIP KWMN KIPR KCOR KRVC KFRD KPAL KWBG KE KTDB KUNR KSPR KJUS KGHG KAWC KCFE KGCC KOLY KSUM KACT KISL KTFN KFLU KSTH KMPI KHDP KS KHLS KMRS KID KN KU KAWK KSAC KCOM KAID KIRC KWMNCS KMCA KNEI KCRS KPKO KICC KPOA KV KDRG KIRF KSEO KVPR KSEP KTER KBCT KFIN KGIC KCIP KZ KG KWAC KRAD KPRP KTEX KNAR KPLS KPAK KSTC KFLO KSCI KIDE KOMS KHSA KSAF KPWR KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KFSC KRIM KVRP KENV KNSD KCGC KDDG KPRV KTBT KWMM KMFO KMOC KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KPAI KO KVIR KREC KX KR KCRCM KBTS KOCI KGIT KNUP KPAONZ KNUC KNNPMNUC KERG KTLA KCSY KTRD KNPP KJUST KCMR KRCM KCFC KCHG KREL KFTFN KLIG KDEMAF KICA KHUM KSEC KPIN KESS KDEV KWWMN KOM KWNM KRFD KMIG KRGY KIFR
LH LY LE LI LG LO LA LU LTTE LAB LOG LT LABOR
MARR MOPS MASS MX MNUC MCAP MO MR MEPP MTCRE MAPP MEPN MZ MT ML MA MY MIL MD MASSMNUC MU MK MTCR MUCN MAS MEDIA MAR MC MI MQADHAFI MPOS MTRE MASC MG MARAD MRCRE MW MP MOPPS MTS MLS MILI MEPI MEETINGS MERCOSUR MCC MIK MAPS MV MILITARY MDC
NATO NZ NL NO NK NU NPT NI NG NEW NSF NA NPG NSG NE NSSP NS NDP NSC NAFTA NH NV NP NPA NSFO NT NW NASA NORAD NATIONAL NGO NR NIPP NZUS NC NRR NAR NATOPREL
OEXC OTRA OPRC OVIP OAS OIIP OSCE OREP OPIC OFDP OMIG ODIP OVP OSCI OIC OECD OIE OPDC ON OCII OPAD OBSP OFFICIALS OPCW OHUM OES OCS OTR OSAC OFDA
PGOV PREL PM PHUM PTER PINR PINS PREF PARM PL PK PU PBTS PBIO PHSA PE PO PROP PA PNAT POL PLN POLITICAL PARTIES PCUL PAK PGGV PAO PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PAS PGIV PHUMPREL PCI PG POGOV PHUMPGOV PEL POLITICS POLICY PINL PP PREO PAHO PBT PMIL POV PRL PDOV PTBS PRAM PREFA PSI PAIGH POSTS PALESTINIAN PARMS PROG PTERE PRGOV PORG PS PGOF PKFK PSOE PEPR PPA PINT PMAR PRELP PINF PNG PFOR PUNE PGOVLO PHUMBA PSEPC PNR POLINT PGOVE PHALANAGE PARTY PDEM PECON PROV PGOC PY PHUH PF PHUS
QA
RU RS RO RW RP RFE REGION REACTION REPORT ROOD RCMP RM RSO ROBERT RICE RSP RF RIGHTS RIGHTSPOLMIL RUPREL RELATIONS
SENV SU SCUL SOCI SNAR SL SW SMIG SP SY SA SHUM SZ SYRIA SF SR SO SARS SN SC SIPRS SI SYR SEVN SG SPCE SK STEINBERG SH SNARCS SAARC SCRS SENVKGHG SAN ST SIPDIS SNARIZ SNARN SSA SPCVIS SOFA SEN SANC SWE SHI
TW TU TBIO TSPL TPHY TRGY TC TT TSPA TINT TERRORISM TX TR TS TN TD TH TIP TNGD TI TZ THPY TP TBID TF TL TV TK TO TRSY TURKEY TFIN TAGS
UN UK UNSC UNGA US UNESCO UP UNHRC UNAUS USTR UNDP UNEP UY UNCHR UG UZ UNPUOS USEU UNMIK UNDC UNICEF UV UNHCR UNCHC UNCSD USOAS UNFCYP USUN USNC UNIDROIT UNO UNCND USPS USAID UE UNVIE UAE UNODC UNCHS UNFICYP UNDESCO UNC
VE VAT VZ VN VC VT VM VI VTPREL VTIZ VTEG
WMO WHO WHA WA WI WWARD WHTI WTRO WS WTO WTRQ WBG WMD WFP WIPO WZ WB WITH WEU
XK XF XY XG XB XV XR XA XZ XL XW XS XM XD XX XU XI XT XH XQ XE XTAG XC
YE YM YI YMCS
ZB ZI ZEALAND ZF ZK ZR ZP ZU ZO ZL ZOELLICK ZJ ZN ZA ZANU

### Browse by classification

CONFIDENTIAL CONFIDENTIAL//NOFORN SECRET SECRET//NOFORN UNCLASSIFIED UNCLASSIFIED//FOR OFFICIAL USE ONLY

### Community resources

Follow us on Twitter Check our Reddit Twitter this Digg this page Contact us on IRC

courage is contagious

### Viewing cable 08REYKJAVIK256, Iceland's Financial Crisis: The Russia Angle

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:

- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08REYKJAVIK256.

Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
08REYKJAVIK256 | 2008-11-03 16:51 | 2011-01-13 05:37 | CONFIDENTIAL | Embassy Reykjavik

`

    VZCZCXRO1934
    OO RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
    DE RUEHRK #0256/01 3081651
    ZNY CCCCC ZZH
    O 031651Z NOV 08
    FM AMEMBASSY REYKJAVIK
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 3871
    RUEATRS/DEPT OF TREASURY WASHINGTON DC IMMEDIATE
    INFO RUEHMO/AMEMBASSY MOSCOW IMMEDIATE 0042
    RHEHNSC/NSC WASHDC
    RUEAIIA/CIA WASHDC
    RUEKDIA/DIA WASHDC
    RUEHZL/EUROPEAN POLITICAL COLLECTIVE

` `

    C O N F I D E N T I A L SECTION 01 OF 02 REYKJAVIK 000256

    SIPDIS

    STATE FOR EUR/FO A/S FRIED

    E.O. 12958: DECL: 11/03/2018
    TAGS: PREL EFIN ECON PGOV RS IC
    SUBJECT:   Iceland's Financial Crisis:  The Russia Angle

    Classified by:  Ambassador Carol van Voorst for reasons 1.4 (b) and
    (d).

    ¶1. (C)  The announcement by Iceland's Central Bank on October 7 that
    Russia would provide a USD 5.4 billion loan created an international
    stir, unleashing a wave of speculation as to who had approached
    Russia, why and when the contact was made, and what the Russians
    could be contemplating as the quid pro quo.  The who and when
    questions seemed to have been put to rest by Prime Minister Geir
    Haarde's comment last week that he had discussed assistance with the
    Russians in August "on his own initiative."  As for the quid,
    everything from landing, refueling, maintenance or other rights at
    the former U.S. base at Keflavik, to advantageous exploration and
    exploitation rights in potential gas and petroleum fields under
    Icelandic waters, has been suggested.

    ¶2. (C)  Following the announcement, a team of Central Bank and other
    financial experts traveled to Moscow October 14-15 for talks.  They
    did not return with a deal, but did hold open the possibility of
    further talks.  Although we have been told there have been telephone
    and e-mail contacts, there have been no subsequent meetings.   In the
    meantime, Russian government comments to the press have been getting
    progressively bleaker, hinting at doubts concerning Iceland's
    creditworthiness.   There has also been casual talk that Iceland's
    failure to gain a UN Security Council seat last month may have
    lessened Russian interest.  International press stories outlining
    Russia's own financial difficulties appear to have significantly
    dampened expectations here.  As more time passes without a successful
    deal,  Russia's motives have been questioned, including suggestions
    that Moscow was never serious about the loan and offered it only as a
    public tions stunt to boost Russia's image and discomfit the West.
    (If so, this tactic has not worked all that well:  Icelandic polls
    taken in October 2006 and October 2008 show the same 39 percent of
    the population favorably disposed towards Russia, though the
    negatives in 2008 are slightly higher.)   Although the Icelandic
    government asserts in public that the deal is still on the table and
    bilateral discussions will continue, in private, high-ranking sources
    in the MFA and the Prime Minister's office tell us that the deal is
    on the back burner and they want it to stay there.   Iceland has no
    interest in a bilateral financial arrangement with Russia except as a
    last life-saving effort should friends and allies fail to come
    through with credit.  Icelandic leaders hope that any such loan would
    be included as part of the IMF bail-out, with Russia only one of a
    consortium of lender countries.   If it is a separate bilateral deal,
    however, the government has also repeatedly assured us and the public
    that the loan would be a purely financial transaction, with no
    foreign policy implications.  Few we have talked to believe that
    Russia would actually be so altruistic.

    ¶3. (C)  There has been no lack of theories and entertaining
    "informed" comment as to why the Russians would be willing to offer
    financial assistance for the first time to a NATO country.  Much of
    the speculation we have heard features one or all of the following:
    corrupt Russian oligarchs, Prime Minister Putin, shady bank dealings,
    money laundering, and secret accounts in the now-failed Icelandic
    banks.  One well-placed observer points to a purported close
    friendship between Russian Ambassador Victor Tatarintsev and PM Putin
    that supposedly inclined the Prime Minister to be generous to
    Iceland; other commentators suggest secret illicit connections
    between various oligarchs and the now defunct Icelandic banks or
    their European branches and subsidiaries. A story that circulated
    among the international press camped out in Reykjavik two weeks ago
    claimed that the Russian leadership offered the loan to recover
    Russian state property that had been illegally put up as collateral
    for a loan that a company closely tied to Putin had obtained from
    Iceland's Kaupthing Bank.

    ¶4. (C)  The matter remains a puzzle, and post can't claim to have a
    firm fix on any part of it.   The MFA Permanent Secretary told the
    Ambassador the MFA had no knowledge of any bilateral loan discussions
    before the Central Bank announcement.  A  senior MFA source blamed
    the whole business on Central Bank shenanigans, asserting that the
    Prime Minister did not know of the contacts between the central banks
    until very recently.  Yet another senior official told us that the
    loan offer started off as something quite different:  when an
    Icelandic citizen owner of a small bank in St. Petersburg complained
    of problems with currency transactions, the Russian Central Bank
    proposed to the Icelandic Central Bank that the two institutions
    discuss some sort of cooperation, presumably a currency swap.  At
    some point this summer, the Prime Minister was made aware of and
    became involved in the budding deal.  How the currency swap became a
    huge loan offer is left unclear.   What does seem certain, though, is
    that the Central Bank's announcement of the loan offer came as a
    surprise to many, including members of the Prime Minister's office
    and the Foreign Minister's inner circle.

    REYKJAVIK 00000256  002 OF 002

    ¶5. (C)  Of all the government representatives who have discussed the
    loan in public, Central Bank Governor David Oddson has been the most
    obviously enthusiastic.  If the Central Bank announcement was an
    attempt by this former Prime Minister and champion wheeler-dealer to
    pressure lagging friends - particularly the U.S. - into quickly
    offering their own loans, the game has not been successful.  Except
    for Norway, whose Foreign Minister announced a loan today, the
    Nordics and the rest of the potential lenders continue to mull over a
    decision.

    ¶6. (C)    There is little public or government support for the loan
    except as a last-ditch effort to rescue Iceland from financial ruin.
    Since the closing of the base at Keflavik in late 2006, the
    Icelanders have kept a wary eye on the increasingly visible Russian
    military activities in the High North.  They don't like the Russian
    presence in the North Atlantic and don't want to encourage it.  This
    government most particularly doesn't want to be beholden to Moscow.
    No letter to Russia was included in the flurry of missives sent last
    week to potential lenders, including the U.S., the European Central
    Bank, China, Japan, and the Nordics.  However, if the Icelanders
    can't find the USD four million they need to complete the agreement
    with the IMF from sources they prefer, then sheer necessity will
    dictate that they take whatever the Russians make available.   As to
    the terms of that loan, stated or implied, the deepening financial
    crisis and the pending social upheaval here suggests that the
    Icelandic government will be in no position to be too choosy.

    VAN VOORST

`