REYKJAVIK, Iceland -- Iceland's Prime Minister Geir Haarde said he believed the International Monetary Fund was holding back on a stalled $2.1 billion aid package until other countries approve their own aid.

Geir Haarde
Iceland needs outside donors, because its small size limits the amount of money the IMF can grant. Iceland says it needs a total of $6 billion.

Potential donors are leery of extending a hand without ensuring Iceland compensates foreign depositors who have money tied up in its banks, a person familiar with the discussions said. An IMF spokesman said the rescue package faces outstanding issues "raised by potential creditors, including the process for determining Iceland's obligations with regard to foreign deposits."

In an exclusive interview with WSJ's Charles Forelle, Iceland Prime Minister Geir Haarde talks about his country's efforts to secure money to bail out its financial system after its spectacular collapse. (Nov. 13)

Mr. Haarde said he hopes the fund will approve the loan package early next week. "We understand that the fund needs to have assurances that it will not be acting alone," he said. "Pieces are gradually falling into place."

Iceland and the IMF staff reached a deal on Oct. 24. Board approval had been expected in early November. An IMF spokeswoman said the fund was "still in the process of ensuring that we have the needed financing," and that a meeting of the fund's board would take place "in due course."

Iceland has commitments for €500 million ($624 million) from Norway, $200 million from Poland and $50 million from the Faroe Islands. The package would be primarily devoted to building the central bank's foreign-currency reserves.

Source:http://online.wsj.com/article/SB122661600466826147.