Iceland moves to shore up economy
Posted by admin on 5 October, 2008 under Business news | 
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Talks are being held in Iceland to persuade the country’s trade unions to repatriate a sizeable portion of their foreign-invested pension funds.
To help stabilise Iceland’s troubled economy, they are also being urged to agree wage restraint, despite the country’s inflation rate of 14%.
But in return, the unions want Iceland to apply for EU membership – a move it has resisted for decades.
The government nationalised Iceland’s third largest bank, Glitnir, last week.
This sent the national currency, the Krona, plummeting. It lost a fifth of its value against the dollar by Friday.
Also, the nationalisation led ratings agencies to downgrade Iceland’s credit rating, and many analysts have said they doubt that Iceland can afford to bail out its other banks, which are also in trouble.
There’s pressure for a deal before markets open, on Monday, to prevent further turmoil.
By Ray Furlong BBC News, Reykjavik
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