Parties aiming to form a new centre-left government for crisis-hit Iceland said on Saturday they were hoping for a deal this weekend, though it might not come through until Sunday. The Social Democrats and Left-Green Party aim to take charge of Iceland after protests helped topple the previous centre-right Prime Minister Geir Haarde.
He became the first leader to fall as a direct result of the global credit crunch. "I am hopeful that a government will be formed this weekend, but I don't have the exact timing yet," prospective new prime minister Johanna Sigurdardottir of the Social Democratic Alliance, told reporters.
A delay in the plan to wrap up government talks on Friday came after the Progressive Party, whose support the proposed minority coalition needs, said it wanted to have a closer look at the government agreement and propose some of its own ideas.
Left-Green leader Steingrimur Sigfusson said a deal could come "possibly later this evening, but more likely tomorrow". The crisis, sparked after Iceland's fast expanding banks collapsed under a weight of debt, forced Iceland to take a $10 billion International Monetary Fund-led rescue package and caused widespread anger.
Haarde of the Independence Party quit on Monday after weeks of protests, which eventually turned violent. The new government will lead the nation to fresh elections, expected between April and June. The deal to form a new government is also being delayed by the fact the Social Democrats require approval for the agreement from their party board, which could need up to 12 hours notice to be called.
Once the deal is finalised, the parties go to the president for a formal handover of power. Sigurdardottir, 66, was social affairs minister in the outgoing administration. She and the Left-Greens have said one of their first jobs will be to remove the central bank head who was strongly criticised for failing to foresee the crisis.
The coalition will likely have to tackle the issue of starting talks on entering the European Union. Iceland has long been cautious about joining the bloc but support has grown during the crisis. The Social Democrats back EU entry, while the Left-Greens are more resistant, but have said they could back a referendum on starting negotiations. Sigfusson has also backed a renegotiation of the IMF loan.
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