Iceland looks to crisis election after PM quits

A day after saying he would quit, Iceland's prime minister voiced "contempt" for some of the actions by banks.

Iceland looks to crisis election after PM quits

A day after saying he would quit, Iceland's prime minister voiced "contempt" on Saturday for some of the actions by banks that triggered the country's economic collapse.

A newspaper called for national unity and an opinion poll predicted a shift to the left at a snap election in May.

Prime Minister Geir Haarde shocked the island nation on Friday when he said he would not seek re-election and called for a vote on May 9. He said he was going abroad for surgery to treat a malignant tumour of the oesophagus.

Haarde told national radio on Saturday he had not stepped down because of the plunging popularity of his coalition and said he hoped to run the government until the elections, despite his health problems.

He also commented for the first time on media reports of wrongdoing in Iceland's banks in the run-up to last year's crisis, when all major banks were nationalised after collapsing under the weight of billions of dollars of foreign debt.

"I would like to use this opportunity to state my disbelief and contempt for some of the things that have been coming into the daylight in regards to the banks," he said, but declined to comment if the actions of the banks had been criminal.

"The investigation is under way and will continue its normal path. No information has been disclosed yet," he said.

Iceland, one of the richest countries in the world in 2007, plunged into crisis in October when it fell victim to the global credit crunch. Its currency collapsed as its financial system imploded.

To stay afloat, it negotiated a $10 billion aid package crafted by the International Monetary Fund and effectively froze trade in its currency.

Call for unity

Daily Morgunbladid, in an editorial, called for national unity to see the country of 320,000 through the troubled times.

"Many tasks ahead will not tolerate any waiting, not even waiting for another kind of government coalition to be formed. Both government parties should now lay aside their differences and work together according to a clear and well defined plan until elections."

Polls show that Haarde's Independence Party, which has run Iceland in coalitions for more than 17 years, will likely be the big loser in an election and that there has been a strong shift in favour of the opposition Left-Green and Progressive parties.

A poll in daily Frettabladid showed the Left-Green party would be the largest by far in an election with almost 33 percent of the vote.

Protests turned violent in the early hours of Thursday, with demonstrators pressing for Haarde, the central bank governor and other senior officials to go. Police used teargas for the first time since 1949 against demonstrators.

Protesters disbanded Friday evening and on Saturday the square outside Iceland's Althing parliament was deserted. A demonstration was expected later in the day, however, with organisers demanding the government step down immediately and not wait until May.

"I don't like the prospects of what lies ahead for Icelanders. I think we won't take any more, we need action and I haven't seen any real action from this government. I definitely don't like the fact that they are going remain in power until May," Erna Arngrimsdottir, a teacher, told Reuters.

Haarde and Foreign Minister Ingibjorg Gisladottir, head of the junior party in the ruling coalition, were set to discuss the election date over the weekend.

Reuters
Last Mod: 24 Ocak 2009, 16:32
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