Icelandic government topples

Icelandic Prime Minister Geir Haarde announced on Monday the immediate resignation of his government in the wake of the country’s dire economic crisis.

“I’m here to announce that I and the leader of the Social Democrats have decided that we will not continue with the coalition,” Haarde told reporters.

The announcement came just days after Haarde announced early elections on May 9 in which he would not run due to health reasons.

A new election date was set after months of public protests calling for the government’s resignation over its handling of the economic crisis.

The government coalition, made up of Haarde’s Independence Party and the Social Democrats since May 2007, had been in talks since the weekend with the Social Democrats demanding that it take over the post of prime minister.

Iceland has been mired in crisis since the collapse of the country’s banks under the weight of debts amassed during years of rapid expansion. Inflation and unemployment have soared, and the krona
currency has plummeted.

Haarde’s government has nationalised banks and negotiated about $10-billion in loans from the International Monetary Fund and individual countries. In addition, Iceland faces a bill likely to run into billions of dollars to repay thousands of Europeans who held accounts with subsidiaries of collapsed Icelandic banks.

The country’s commerce minister, Bjorgvin Sigurdsson, quit on Sunday citing the pressures of the economic collapse.
Sigurdsson said Icelanders had lost trust in their political leadership.

Thousands have joined noisy daily protests in the last week over soaring unemployment and rising prices.—Sapa-AFP

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