Iceland is facing a tough economic stipulation. Now there is a huge concern over its repayment of a $5 billion bailout loan. The talks between Iceland and the Treasury over the issue ended without any result as the Government in Reykjavik also insisted that the proposed interest bill was too tedious.

But the Icelandic Prime Minister Johanna Sigurdardottir is hoping to reach a solution to the ongoing talk. She believes that the deal is still open for a short term.

Earlier, Iceland and Britain have decided to have a proper repayment schedule of the credit. Iceland has to pay compound interest of 5.5% on the capital owed according to the terms of the schedule. But since then Iceland has breeched on the terms of the deal arguing that the interest payments are too elevated.

However, the British and Dutch governments have approved to extend a $5.5 billion rescue loan to Iceland. This loan is anticipated to safeguard the deposits of UK charities to avoid a huge banking crisis. But a unanimous decision is yet to come up.