"It is clear that Iceland will need substantial foreign aid in order to prevent further major damage to the economy, " said Beat Siegenthaler, chief strategist of emerging markets at TD Securities in London.

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There has been a bias towards centre-left organisations, with a particular emphasis on those promoting policies that are unpopular with the public, such as increasing foreign aid, restricting lifestyle freedoms and further centralising power within EU institutions.

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But it is thought Washington is reluctant to commit further funds and will want to spend its foreign aid unilaterally, rather than committing itself to a joint programme.

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