http://news.bbc.co.uk/2/hi/europe/7851415.stm
Crisis claims Icelandic cabinet
Iceland's coalition government has collapsed as a result of an escalating economic crisis.
Prime Minister Geir Haarde announced the immediate resignation of his cabinet, after talks with coalition partners broke down.
Iceland's financial system collapsed in October under the weight of debt built up during years of rapid growth.
The currency has since plummeted, with unemployment soaring. The economy is forecast to shrink by 9.6% this year.
In a series of protests, demonstrators have accused the government of leading the country to ruin.
Mr Haarde told reporters on Monday: "I really regret that we could not continue with this coalition. I believe that that would have been the best result."
The coalition between Mr Haarde's Independence Party and Foreign Minister Ingibjorg Gisladottir's Social Democratic Alliance had been under strain for the past three months.
The prime minister said he would speak to Iceland's president to formally dissolve the government.
Last week Mr Haarde called an early general election for 9 May, adding that he would not stand for health reasons. The Social Democratic Alliance is now expected to look for new coalition partners to form a government until the election.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/h...pe/7851415.stm
Published: 2009/01/26 13:52:23 GMT
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