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| Version 7 | Version 8 |
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| Crisis claims Icelandic cabinet | Crisis claims Icelandic cabinet |
| (20 minutes later) | |
| Iceland's coalition government has collapsed under the strain of an escalating economic crisis. | Iceland's coalition government has collapsed under the strain of an escalating economic crisis. |
| Conservative Prime Minister Geir Haarde announced the resignation of his cabinet, after talks with his Social Democratic coalition partners failed. | Conservative Prime Minister Geir Haarde announced the resignation of his cabinet, after talks with his Social Democratic coalition partners failed. |
| He said he could not accept the Social Democrats' demand to lead the country. | He said he could not accept the Social Democrats' demand to lead the country. |
| Iceland's financial system collapsed in October under the weight of debt, leading to a currency crisis, rising unemployment and daily protests. | Iceland's financial system collapsed in October under the weight of debt, leading to a currency crisis, rising unemployment and daily protests. |
| The economy is forecast to shrink by almost 10% this year. | The economy is forecast to shrink by almost 10% this year. |
| The coalition between Mr Haarde's Independence Party and Foreign Minister Ingibjorg Gisladottir's Social Democratic Alliance had been under strain in recent months. | The coalition between Mr Haarde's Independence Party and Foreign Minister Ingibjorg Gisladottir's Social Democratic Alliance had been under strain in recent months. |
| Mr Haarde told reporters on Monday: "We couldn't accept the Social Democratic demand that they would lead the government." | Mr Haarde told reporters on Monday: "We couldn't accept the Social Democratic demand that they would lead the government." |
| The Independence Party currently controls 25 of the country's 63 parliamentary seats, to the Social Democrats' 18. | The Independence Party currently controls 25 of the country's 63 parliamentary seats, to the Social Democrats' 18. |
| Meltdown | Meltdown |
| The announcement comes three days after the prime minister called an early general election for 9 May, adding that he would not stand for health reasons. | The announcement comes three days after the prime minister called an early general election for 9 May, adding that he would not stand for health reasons. |
| The coalition government, in place since 2007, had been due to remain in place until 2011. | The coalition government, in place since 2007, had been due to remain in place until 2011. |
| ICELAND 300,000 peopleBanking sector collapsed in October 2008Krona fell by almost two-thirds against euroEconomy predicted to shrink by 9.6% in 2009 class="" href="/1/hi/world/europe/7851825.stm">Iceland bloggers react to crisis class="" href="/1/hi/world/europe/7790264.stm">Activists fight Iceland woes | |
| Ms Gisladottir said a more powerful leadership was needed. | Ms 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 government's actions in the last weeks and months were not swift enough," she said. |
| Her party is now expected to look for new partners to form a government until the election. | Her party is now expected to look for new partners to form a government until the election. |
| In recent months the Social Democrats had urged Mr Haarde to fire the central bank governor and move towards closer ties with Europe. | In recent months the Social Democrats had urged Mr Haarde to fire the central bank governor and move towards closer ties with Europe. |
| Iceland, a country of about 300,000 people, has traditionally sought to stay outside the EU. | Iceland, a country of about 300,000 people, has traditionally sought to stay outside the EU. |
| But last month European Union Enlargement Commissioner Olli Rehn said the island might apply for membership as soon as this year. | But last month European Union Enlargement Commissioner Olli Rehn said the island might apply for membership as soon as this year. |
| The extent of Iceland's trouble became evident as conditions tightened in global credit markets last year. | The extent of Iceland's trouble became evident as conditions tightened in global credit markets last year. |
| It emerged that the country's banks, which had amassed debt during years of rapid expansion, owed about six times the country's economic output. | It emerged that the country's banks, which had amassed debt during years of rapid expansion, owed about six times the country's economic output. |
| Money from around the world had also poured into Iceland because interest rates there exceeded 10%. | Money from around the world had also poured into Iceland because interest rates there exceeded 10%. |
| Mr Haarde's government responded to the financial collapse by nationalising leading banks. It also negotiated about $10bn in loans with the International Monetary Fund and donor countries. | Mr Haarde's government responded to the financial collapse by nationalising leading banks. It also negotiated about $10bn in loans with the International Monetary Fund and donor countries. |
| Commerce Minister Bjorgvin Sigurdsson resigned on Sunday citing the pressures of the economic meltdown. | Commerce Minister Bjorgvin Sigurdsson resigned on Sunday citing the pressures of the economic meltdown. |