As this tiny, volcanic nation in the middle of the North Atlantic finds itself cut off from the outside world, Icelanders are wondering who, if anyone, will sail to their rescue.
Their island country has never felt so alone. Its major banks have failed, its currency has collapsed, its stock market is suspended _ and its leaders seem uncertain where to turn for help.
"Nobody is helping us," said Kolbeinn Blandon, a car dealer whose European autos were gathering dust on his lot on the edge of Reykjavik.
Iceland's economic turmoil just kept on churning Friday. It's Straumur-Burdaras financial group canceled its planned purchase of the overseas corporate finance and brokerage businesses of the failed Landsbanki bank, which was taken over by the government this week.
Prime Minister Geir H. Haarde insisted Friday the economic the situation was "moving slowly back to normal" but admitted that some residents and industries would be hard hit for a long time.
"It will take us several years probably to recover in some areas. Some people have lost their life savings," he admitted.
Icelandic officials have held talks with a visiting International Monetary Fund delegation, but Haarde has been reluctant to commit to receiving funding from the world body.
"The IMF are our friends, they want to help, but we still haven't made up our minds whether or not we want to enter a program" with the conditions they might set, Haarde said Thursday.
The IMF said it had activated emergency lending procedures _ last used during the Asian economic crisis a decade ago _ to speed up help to struggling economies.
None is struggling more than Iceland, whose economic fall has been even more rapid than its spectacular rise. Deregulation and a 1990s stock market boom fueled the rapid growth of Iceland's banking sector, which came to dwarf the rest of the economy and provided financing for deals that snapped up businesses around the world. When global liquidity markets dried up, the banks struggled to refinance their heavy debts.
Now Icelanders are watching helplessly as their economy implodes. The government has seized control of the country's top three banks; it started then abandoned an attempt to fix the value of Iceland's currency, the krona; and it closed the stock market until next week.
"From the politicians' comments, they see themselves as too proud to go to the IMF," said Venla Sipila, a senior economist at analyst Global Insight. "But that's what they should do if they want to avoid even further deterioration in their creditworthiness."
Haarde has instead turned to Russia, from whom Iceland is seeking a 4 billion euro ($5.4 billion) loan _ a move that has raised eyebrows in some quarters. Many are wondering what Russia will seek in return from NATO member Iceland.
"I have no indication they are asking for anything unusual or unnatural in return," said Haarde, who pointed out that other European countries have not exactly rushed to Iceland's help.
On the contrary, Britain, one of Iceland's nearest neighbors, has frozen Icelandic bank assets and threatened legal action to recoup Britons' savings in subsidiaries of the failed banks.
Paul Rawkins, an Iceland expert at Fitch ratings in London, said Iceland "contacted a lot of governments and Russia is the one that came through."
"Everybody else is too busy with their own troubles," he said.
Iceland and Russia are not major trading partners, but the two countries have some economic ties. Some of the figures at the center of Iceland's financial collapse _ such as father-and-son billionaires Bjorgolfur Thor Bjorgolfsson and Bjorgolfur Gudmundsson, major shareholders in the failed Landsbanki bank _ made their fortunes in Russia. Rumors of shady Russian financial involvement in Icelandic businesses have been around for years.
Russia's newfound role as national savior is bringing out the black humor in many Icelanders.
A viral e-mail going round Reykjavik proudly displays the country's "new" currency _ a krona note, worth 1 million, with a picture of Russian Prime Minister Vladimir Putin in place of an Icelandic dignitary.
Iceland's currency may be another victim of the crisis. Many are now asking whether Iceland, population 320,000, has been too proud in not joining the European Union and sheltering under the euro common currency.
Before trading ground to a halt Thursday, Iceland's currency was trading at 340 krona to the euro _ a level far above the 130 krona to the euro peg that the central bank tried, and failed, to impose earlier this week.
Frosti Olafsson, an economist at the Iceland Chamber of Commerce, said the issue of adopting the euro had been on the back burner but had taken on new urgency.
"It doesn't seem that the current government is fond of the idea of joining the EU," he said. "(Now) the discussion will probably heat up rather than cool down."
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Jane Wardell reported from Reykjavik, Iceland and Jill Lawless from London.
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