Icelandic Prime Minister Geir Haarde announced 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, adding that he would now try to build a broad coalition comprising all parties in parliament.
The announcement came just days after Haarde called for snap elections on May 9 in which he would not run due to health reasons, after months of protests calling for the government's resignation over its handling of the crisis. Many Icelanders blame the government for the collapse of the country's financial sector in October, which led the state to take control of three major banks as the economy and currency faltered badly.
The government coalition, made up of Haarde's Independence Party and the Social Democrats since May 2007, had been in negotiations since the weekend, with the Social Democrats demanding that it take over the post of prime minister. "We couldn't accept the Social Democratic demand that they would lead the government. That is not something we agreed on in 2007," Haarde said.
The head of the Social Democrats, Foreign Minister Ingibjorg Solrun Gisladottir, said meanwhile that a more powerful leadership was needed. "The government's actions in the last weeks and months were not swift enough," she said.
Haarde said last week he would not seek re-election and would resign as head of the Independence Party at a party congress at the end of March because he had discovered he was suffering from a malignant tumour of the oesophagus. But that did little to quell protests in the country of just 320,000. Some 5,000 people turned out Saturday for yet another demonstration calling for the government's immediate resignation.
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