Iceland's cries for help are answered
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The International Monetary Fund (IMF) has reached a "tentative" agreement to give aid to Iceland worth about $2.1bn (£1.3bn; 1.58bn euros).
It is the first Western country to have approached the IMF for aid since 1976.
Iceland said it should have immediate access to $833m if the "comprehensive stabilisation programme" is approved.
Its financial system is close to collapse after the country was forced to take over three of its biggest, debt-laden banks this month.
Iceland's currency, the krona, has almost halved in value this year and banking transactions with other countries have almost completely frozen.
The IMF said the tentative agreement aimed to "restore confidence" in the nation's banking system, but warned that the country's economy could contract by as much as 10% next year
"The overarching goal is to support Iceland's efforts to adjust to the economic crisis in a more orderly and less painful way," Mr Strauss-Kahn said.
Before going to the IMF, it had been in talks with Russia for a $4bn loan, but discussions broke down.
It is the first Western country to have approached the IMF for aid since 1976.
Iceland said it should have immediate access to $833m if the "comprehensive stabilisation programme" is approved.
Its financial system is close to collapse after the country was forced to take over three of its biggest, debt-laden banks this month.
Iceland's currency, the krona, has almost halved in value this year and banking transactions with other countries have almost completely frozen.
The IMF said the tentative agreement aimed to "restore confidence" in the nation's banking system, but warned that the country's economy could contract by as much as 10% next year
"The overarching goal is to support Iceland's efforts to adjust to the economic crisis in a more orderly and less painful way," Mr Strauss-Kahn said.
Before going to the IMF, it had been in talks with Russia for a $4bn loan, but discussions broke down.
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