Iceland's economy shrinks further

Its economy contracted 5.7% in the July to September period compared to the previous three months. On an annual basis the economy shrank by 7.2%.

The country's financial system collapsed after last year's credit crunch because its banks had lent more money than the country had in capital.

The government had to turn to the International Monetary Fund for help.

The European Union also lent billions of dollars to help it survive the crisis.

When the three biggest banks folded a year ago they owed more than $60bn to foreign lenders.