WORLD> Europe
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WORLD> Europe
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Iceland PM to quit, wants May election
(Agencies)
Updated: 2009-01-24 09:10 Some senior figures in his party had also said they favoured an early election, but Haarde had up to now vowed to defy plunging popularity and stay on.
As no party is likely to win an overall majority, a new coalition is all but certain. However, its likely composition is unclear as Iceland has no tradition of the bloc politics seen in some Nordic countries, where power has shifted between fairly rigid right-wing and left-wing coalitions. Recent opinion polls indicate that the Left-Green Party, currently in opposition, is best placed to head a new coalition. To stay afloat last year, Iceland negotiated a $10 billion aid package crafted by the International Monetary Fund and effectively froze trade in its currency. The handful of market analysts still looking at Iceland's shattered economy saw little immediate impact from upcoming elections, with the crown currency still barely traded in international markets after last year's collapse. "This is not a good time to have a seriously sick prime minister and new elections," Michael Ganske, head of emerging market research at Commerzbank, said. "Although obviously the country is already in a very difficult situation, it's not that we are talking about a highly successful government losing its main leader and then capital markets panic. The current leadership didn't do a very good job at organising the economy so I think market wise its not a major issue," he said.
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