Iceland seeks $5.4 billion from Russia

REYKJAVIK, Iceland, Oct. 8 (UPI) -- The government of Iceland is seeking a loan of 4 billion euros -- about $5.4 billion -- from Russia to rescue its beleaguered financial system.

Officials said, however, Iceland would not agree to provide military aid to Russia in return for the money, The Financial Times reported Wednesday. But they did say they were disappointed Western European countries had not come to their aid.

"We have not received the kind of support that we were requesting from our friends," Iceland Prime Minister Geir Haarde said Tuesday. "So in a situation like that one has to look for new friends."

Iceland is a member of NATO but not of the European Union. While the country has no military of its own, the United States maintained an air base at Keflavik International Airport until 2006.

After a period pf economic prosperity, Iceland has been hit hard by the international credit crisis. The krona has lost much of its value, and the country's major banks come close to failure.

Russian Finance Minister Alexei Kudrin confirmed his country is examining Iceland's loan request.

"Iceland is well known as a country with tough budgetary discipline and a high rating of reliability. We see such an application -positively," he said.