Iceland's government collapses

Prime minister says coalition has fallen due to country's financial crisis.

    Haarde has revealed he is suffering from a
    malignant throat tumour [AFP]


    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.

    The Social Democrats said they are considering a possible coalition with the Left Greens.

    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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