A delegation of ministers from Iceland is in Moscow where talks are underway about a multi-billion euro loan to help the island nation cope with its financial crisis.

Russian officials say no details have been agreed but they are considering the loan favourably.

Earlier, Iceland’s central bank cut its main interest rate to 12 per cent from 15.5 per cent in a bid to shore up its ailing economy.

In Brussels, the European Commission promised to help Iceland, and Belgium offered a lifeline to Kaupthing Bank where thousands of Belgians have savings.

The Belgian finance minister is also trying to persuade the International Monetary Fund to intervene.

Iceland’s economy of 300,000 people has seen rapid growth bringing unprecedented prosperity. Banks built up operations overseas, taking on huge debts and when the credit crunch hit they were unable to meet their obligations.

Iceland has also approached NATO, complaining about Britain using anti-terrorism laws to take Iceland’s biggest bank into administration.

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