Iceland turns to European Commission for funds

BRUSSELS, Nov 10 (Reuters) - Crisis-hit Iceland has formally asked the European Commission for financial help, but support from the EU executive would be small and is conditional on sorting out deposit guarantees between Iceland and EU members.

"This can only be done after Iceland and some EU members reach an agreement on bilateral issues related to the deposit guarantee schemes and protection of depositors," Commission spokesman Johannes Laitenberger told a regular news briefing.

"The Commission is confident that a resolution of this issue is possible," he said.

"The Commission could start discussions with Iceland soon after. In order to be clear, what we are talking about, the level of assistance that the Commission could provide for Iceland, will be small," he said.

"This should be seen more as a political gesture, a compliment, and it will have to be complemented by bilateral support including possibly by other EU members," he said. (Reporting by Jan Strupczewski, editing by Dale Hudson)