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Should Norway bail out Iceland?


icesaveWhile not exactly pocket change, Iceland’s $5.5 billion Icesave debt to Britain and the Netherlands amounts to just 1.2 percent of the value of Norway’s offshore wealth fund. For Iceland, it’s more than $15,000 per citizen.

Given the two countries’ close historic links — Norwegian Vikings discovered the Atlantic island where people still speak a version of “old Norwegian” — speculation about Oslo coming to the rescue has Reykjavik licking its lips.

It would take some coaxing of the Norwegian electorate, but why shouldn’t Oslo help out its crisis-hit cousin, Icelandic newspapers are asking.

On muted idea has Norway buying Icesave debts and allowing Reykjavik to repay the loans on better terms than it has gained from the Dutch and British governments.