* Preconditions for easing of FX controls nearly in place
* Finmin sees economic growth in 2011
* Says informal Icesave talks progressing in good spirit
By Mia Shanley
REYKJAVIK, Nov 2 (Reuters) - Iceland is almost ready to ease emergency capital controls put in place after its 2008 financial meltdown, while much-needed economic growth finally appears to be at hand, the island's finance minister said on Tuesday.
"Everything points to some growth in 2011, but the question will be how much will it be?" Finance Minister Steingrimur Sigfusson told Reuters. "Is it a mild, slight recovery or a better one?"
Sigfusson, in an interview, also said talks with creditors Britain and the Netherlands were going well as Iceland tries to settle a nagging dispute that has complicated its recovery efforts.
Iceland's economy went into a tailspin after its top three banks collapsed under a mountain of debt in late 2008.
Since then, the battered crown has recovered some losses, interest rates have been chopped by more than half from a record high 18 percent, and foreign reserves have been built up to comfortable levels thanks to aid from the International Monetary Fund and Nordic neighbours.
Sigfusson said one of the final preconditions for the further easing of capital controls -- a sound financial system -- was within sight.
"We are pretty close to the end of that," he said. "We are close to having the most important preconditions in place."
The island's banks probably don't need fresh capital, but they do need to restructure corporate and household debt more quickly if the economy is to gain momentum, he said.
"In terms of economic growth, this is one of the most important issues," he said. "There are a lot of businesses that are ok, that have good cash flow, but they are too indebted to really start to move to invest or speed up production."
"They have by and large been doing well through the crisis and could speed up and invest and gear up their production as soon as they have their balance sheets in order."
DEALING WITH DEBT
Measures to help debt-laden individuals could also soon be introduced, but he was dismissive of calls for wide-scale write-offs of mortgage debts.
"I think that is more or less off the table. It is too expensive, it is too ineffective and the arguments are not very sound when you go into the root of the problem."
The country has its own massive debts to deal with. Iceland owes Britain and the Netherlands some $5 billion for money lost in high-interest "Icesave" deposit accounts.
The minister said informal discussions with Britain and the Netherlands had been taking place in good spirit, helped by improving prospects for assets held by the failed banks.
"The returns are moving upwards, not downwards, and the uncertainty regarding the recovery rate is going down as more and more capital is already gathered," he said.
Iceland's foreign minister said on Tuesday in Oslo that an Icesave resolution could be reached this year. [ID:nLDE6A125G]