The International Monetary Fund (IMF) has approved a loan of 160 million dollars for Iceland after months of political wrangling. The money is part of a larger loan that will eventually total more than two billion dollars.

At the end of 2008 the IMF decided to lend money to Iceland, which had been hard hit by the economic crisis. However, the latest instalment was held back by the United Kingdom and the Netherlands, which both have a vote in the IMF.

London and The Hague wanted to close a deal that would first pay them back for compensating savers in their own countries who had lost money when the Icelandic internet bank Icesave crashed in 2008. An earlier deal had been rejected by Icelanders in a referendum in March.

The Icesave negotiations, which have now lasted for several months, are continuing.