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Coalition talks begin in Iceland
President asks Social Democratic Alliance to hold discussions with Left-Green party.
Last Modified: 27 Jan 2009 12:42 GMT

Gisladottir said she hoped talks with the Left-Green party would be completed before the weekend [AFP]

Iceland's president has asked Ingibjorg Gisladottir, leader of the Social Democratic Alliance, to form a new ruling coalition, following the collapse of the country's government on Monday.

Olafur Ragnar Grimsson said he had "decided to ask the leaders of the Social Democratic Alliance and the Left-Green party to engage in conversation about forming a new minority government backed by the Progressive party."

Gisladottir said she hoped talks with the Left-Green party would be completed before the weekend.

"I thank the president for his trust and we will try and come to a quick conclusion in our discussions, preferably by the weekend," she said.

On Monday, Geir Haarde, the former prime minister, announced his resignation, saying he regretted that his ruling coalition could not continue.

Haarde's government, a coalition between his Independence party and the Social Democratic Alliance, had been under pressure since the global financial crisis hit Iceland in October.

On Friday, the prime minister had called early national elections for May 9, revealing that he would not seek a new term because of a malignant throat tumour.

Discord

In negotiations with the coalition over the weekend, the Social Democrats had demanded the post of prime minister.

Haarde said: "We couldn't accept the Social Democratic demand that they would
lead the government."

Ingibjorg Gisladottir, Iceland's foreign minister and leader of the Social Democrats, was a potential replacement for Haarde.

Gisladottir said a more powerful leadership was needed.

"The government's actions in the last weeks and months were not swift enough," she said.

On Sunday, Bjorgvin Sigurdsson, Iceland's minister of commerce, resigned over his part in causing the economic crisis.

Sigurdsson, a member of the Social Democratic Alliance, said: "I have decided to do this to take responsibility. I realised last night that for me, at least, there is no
going back."

Source:
Agencies
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