Iceland's ruling parties meet, future uncertain

Iceland's two ruling coalition partners plan to meet separately to try to agree on terms to keep the government intact until an early May election.

Iceland's ruling parties meet, future uncertain

Iceland's two ruling coalition partners plan to meet separately on Monday to try to agree on terms to keep the government intact until an early May election.

The global financial crisis hit Iceland in October, ending a decade of rising prosperity in a matter of days by triggering a collapse in the currency and financial system.

Prime Minister Geir Haarde told the country on Friday he would not seek re-election because he has cancer, and proposed an early parliamentary election on May 9.

The Independence Party and the Social Democratic Alliance, will meet separately in parliament at 1000 GMT on Monday to see what they can agree on to keep the government going.

An editorial in the Morgunbladid daily called for an end to political infighting.

"Today is the day when the government coalition parties should stop running in circles and start making decisions that enable them to work together until elections. There are no better alternatives."

Social democrat demands

Foreign Minister Ingibjorg Gisladottir, leader of the Social Democrats, met Haarde on Sunday evening to discuss her conditions to maintain the coalition.

She called for the resignation of the board of the central bank and its governor, David Oddsson.

Icelandic media said Gisladottir had also demanded to be the prime minister until the election. Haarde has said he wants to keep running Iceland until the vote.

Polls show both coalition parties trailing the opposition Left-Green Party, indicating that a shift in power is likely.

Iceland's commerce minister resigned on Sunday, citing his role in the economic collapse, casting further doubt on the government's ability to rule.

A third Social Democrat demand is an amendment to the constitution before the elections to allow EU accession talks, Icelandic media reported.

Protests have been held regularly on Saturdays since the crisis started last year. Demonstrations overnight were largely calm but police held five people for vandalism after a small group protested outside the central bank.

Reuters
Last Mod: 26 Ocak 2009, 13:45
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