Cable Viewer

Currently released so far... 12856 / 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 2011/05/18 2011/05/19 2011/05/20 2011/05/21 2011/05/22 2011/05/23

### 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
1996/07 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 Consulate Karachi
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
AVERY AMGT AR ASEC AMED AORC AG AU AM APEC ABUD AF AS AGRICULTURE AEMR ASEAN APECO ACOA AJ AO AFIN ABLD ADPM AY ASCH AE AFFAIRS AA AC ARF APER AFU AINF AODE AMG ATPDEA AGAO ASECKFRDCVISKIRFPHUMSMIGEG AID AL AORL AFSI AFSN ADCO ASUP AN AIT ANET ASIG AGMT ADANA AADP ACS AGR AMCHAMS AECL AUC AFGHANISTAN ADM ACAO AND ATRN ALOW APCS AORG AROC ACABQ AX AMEX AZ ARM AQ ATFN AMBASSADOR ACBAQ ASEX AER
BR BA BO BL BK BT BD BU BBSR BMGT BM BY BX BTIO BEXP BG BB BH BF BP BWC BRUSSELS BN BTIU BIDEN BE BILAT BC
CA CS CASC CO CI CD CH CN CY CONDOLEEZZA CU CE CVIS CG CMGT CF CPAS CDC CW CJAN CJUS CTM CM CFED CODEL CWC CR CBW CAN CLMT CBC CONS COUNTERTERRORISM CIA CDG CIC COUNTER CT CNARC CACM CB CV CIDA CLINTON CHR COE CIS CBSA CEUDA CAC CL CACS CAPC CTR COM CROS CARSON COPUOS CICTE CYPRUS COUNTRY CBE CKGR CVR CITEL CLEARANCE CARICOM CSW CITT CDB
DA DR DTRA DEA DHS DJ DO DEAX DAO DCM DE DOD DOMESTIC DK DPRK DEPT DISENGAGEMENT DOE DS DEFENSE
EUN ECON ELAB ETRD EFIN ECIN EAGR EAIR EN EG ECA ET ER EWWT EIND EINV EAID EC EU EFIS ETTC EPET ENRG EMIN ECPS ENGR EINVETC ELTN ECONCS EZ ES EI ECONOMIC ELN EINT EPA ETRA EXTERNAL ESA ETRDEINVECINPGOVCS EAIG EUR EK EUMEM EUREM EUC ENERG ERD EFTA ETRC ETRN EINVECONSENVCSJA EEPET EUNCH ESENV ENNP ENVI ECINECONCS ELECTIONS ENVR ENIV ETRO ETRDECONWTOCS ECUN EXIM EFINECONCS ECONOMY ERNG EINVEFIN ETC EAP EINN EXBS ENGY ECONOMICS EIAR EINDETRD ECONEFIN EURN EDU ETRDEINVTINTCS ECIP EFIM EAIDS EREL
FI FR FTA FTAA FBI FAC FJ FM FDA FARC FAO FO FOR FMLN FISO FAS FREEDOM FOREIGN FINANCE FINR FOI
GV GA GG GE GM GH GTIP GT GZ GAERC GR GOI GCC GOV GY GANGS GERARD GTMO GL GF GAZA GLOBAL
HK HUMAN HA HO HR HU HURI HILLARY HYMPSK HSTC HEBRON HUMOR HI
IV IS IC IIP IR ICRC IZ IWC IAEA IT IN IRS ICAO IQ IMO ILC IMF ILO IF ITPHUM IL IO ID ISRAEL IACI INMARSAT IPR ICTY ICJ INDO IA IDA IBRD IAHRC ISLAMISTS IGAD ITU ITF INRA INRO INRB ITALY IBET INTELSAT ISRAELI IDP ICTR ITRA IRC IRAQI IEFIN ITPGOV ITALIAN INTERNAL INTERPOL IEA INR IZPREL IRAJ
JA JP JO JM JOSEPH JUS JAMES JOHN JOHNNIE
KPAO KV KGIT KPAL KDEM KCRM KISL KPKO KSCA KOMC KTFN KNNP KN KZ KIPR KE KCIP KWMN KGIC KTIA KFRD KHDP KSEP KMPI KG KIRF KJUS KWBG KHLS KCOR KMDR KU KTDB KTIP KS KFLU KGHG KRAD KSPR KHIV KCOM KAID KOM KUNR KRVC KICC KBTS KSUM KOLY KAWC KIRC KDRG KCRS KNPP KSTH KWNM KRFD KVIR KLIG KFLO KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KVPR KTEX KTER KRGY KCFE KIDE KSTC KREC KR KPAONZ KIFR KOCI KBTR KBIO KMCA KGCC KACT KMRS KAWK KSAC KWMNCS KNEI KPOA KSEO KFIN KWAC KNAR KPLS KPAK KSCI KPRP KOMS KBCT KPWR KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KRIM KDDG KPRV KSAF KCGC KPAI KFSC KMFO KID KMIG KVRP KNSD KMOC KTBT KENV KCMR KWMM KHSA KO KX KCRCM KNUP KNUC KNNPMNUC KERG KTLA KCSY KTRD KJUST KRCM KCFC KCHG KREL KFTFN KDEMAF KICA KHUM KSEC KPIN KESS KDEV KWWMN
LY LE LH LABOR LI LG LO LA LU LOG LTTE LAB LT
MARR MOPS MO MASS MX MA MR MNUC MCAP MAPS MD MV MTCRE MY MP ML MILITARY MEPN MARAD MDC MU MEPP MIL MAPP MZ MT MASSMNUC MK MTCR MUCN MAS MEDIA MAR MI MQADHAFI MPOS MG MPS MW MC MTRE MRCRE MASC MOPPS MTS MLS MILI MEPI MEETINGS MERCOSUR MCC MIK
NATO NL NI NZ NG NO NP NK NU NDP NPT NSF NR NAFTA NATOPREL NS NEW NA NE NSSP NSC NH NV NPA NSFO NT NW NASA NSG NORAD NATIONAL NPG NGO NIPP NZUS NC NRR NAR
OEXC OVIP OTRA ODIP OFDP OPDC OPIC OIIP OPRC OAS OREP OSCE OECD OPCW OSCI OMIG OVP OIE ON OCII OPAD OBSP OFFICIALS OES OCS OIC OHUM OTR OSAC OFDA
PTER PREL PE PHUM PGOV PARM PINR PREF PINS PBTS PA PK PM PL PO POL PROP PSOE PHSA PAK PY PLN PMAR PHUH PBIO PF PHUS PTBS PU PNAT POLITICAL PARTIES PCUL PGGV PAO PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PAS PGIV PHUMPREL POGOV PEL PP PINL PBT PG PINF PRL PALESTINIAN PSEPC POSTS PAHO PROV PHUMPGOV POV PGOC PNR PREFA PMIL PREO POLITICS POLICY PDOV PCI PRAM PSI PAIGH PJUS PARMS PROG PTERE PRGOV PORG PS PGOF PKFK PEPR PPA PINT PRELP PNG PFOR PUNE PGOVLO PHUMBA POLINT PGOVE PHALANAGE PARTY PDEM PECON
QA
RS RU RW RIGHTSPOLMIL RICE RUPREL RIGHTS RO RF RELATIONS RP RM RFE REGION REACTION REPORT RCMP RSO ROOD ROBERT RSP
SCUL SNAR SP SENV SU SO SMIG SOCI SW SA SZ SY SL SENVKGHG SF SR SN SARS SANC SHI SIPDIS SEVN SHUM SC SI STEINBERG SK SH SNARCS SPCE SNARN SG SYRIA SNARIZ SWE SIPRS SYR SAARC SEN SCRS SAN ST SSA SPCVIS SOFA
TSPL TBIO TU TH TP TRGY TPHY TZ TW TX TSPA TFIN TC TI TS TAGS TK TIP TNGD TL TV TT TINT TERRORISM TR TN TD TBID TF THPY TO TRSY TURKEY
UN UNSC UK US UNGA UNDP UP UG USTR UNHRC UY UNESCO UNMIK UNEP UZ UNO UNHCR USEU UNAUS UNCHR UNPUOS UNDC UNICEF UNCHC UNCSD USOAS UNFCYP UNIDROIT UV UNCND USUN USNC USPS USAID UE UNVIE UAE UNODC UNCHS UNFICYP UNDESCO UNC
VZ VM VE VT VAT VC VI VTPREL VN VTIZ VTEG
WS WHA WHO WTRO WIPO WEU WZ WTO WMO WA WWARD WHTI WTRQ WBG WFP WB WI WMD WITH
XA XR XM XG XW XB XV XF XD XS XK XY XC XL XZ XX XU XI XT XH XQ XE XTAG
YI YM YE YMCS
ZI ZF ZU ZR ZK ZANU ZB ZEALAND ZP ZO ZL ZOELLICK ZJ ZN ZA

### 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

`