UPDATE 1-Iceland introduces aid package 2.0 to help firms and families

(Adds details, background)

COPENHAGEN, April 22 (Reuters) - Iceland will inject an additional $420 million into the economy with a package of measures to help smaller businesses and vulnerable groups recover from the coronavirus lockdown, the government said late on Tuesday.

Iceland, which has had success in curbing the spread of the coronavirus through a rigorous testing and tracing strategy, announced last week it would begin lifting lockdown measures in early May as the outbreak showed clear signs of slowing.

In a second tranche of government aid, following a $1.6 billion aid package in early March, Iceland’s government said it would provide extra help to jobseekers, students and vulnerable groups in society.

“Today’s announcement reflects our priorities to protect jobs, embrace our people and look to the future,” Prime Minister Katrín Jakobsdóttir said in a statement.

A summer school term would be established for students in upper secondary schools and universities and around 3,000 temporary summer jobs would be created.

Workers in the health sector would be extraordinarily compensated with a one-off bonus for working on the front-line against the virus, and private media organisations would be offered help in order to “support pluralism and diversity”, the government said.

On the business side, companies that have had to halt operations would be compensated, the government said, while smaller businesses would be offered immediate supports loans.

Iceland’s central bank has cut its benchmark rate twice since the coronavirus outbreak, and initiated an asset purchase programme to accommodate an increase in bond issuance to fund state aid.

So far, Iceland has had 1,778 confirmed infections after testing close to 44,000 people and only 10 deaths among people diagnosed with COVID-19, the disease caused by the coronavirus, according to data from authorities. (Reporting by Nikolaj Skydsgaard; Editing by Andrew Heavens and Alex Richardson)