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Iceland holds parliamentary polls Iceland holds parliamentary poll
(about 7 hours later)
Parliamentary elections are due to be held in Iceland, one of the countries most dramatically affected by the global economic crisis. Voting is under way in early parliamentary elections in Iceland, one of the countries most dramatically affected by the global economic crisis.
The small North Atlantic nation has a population of only 300,000.The small North Atlantic nation has a population of only 300,000.
But it had to take a $10bn (£6.8bn) rescue package, led by the International Monetary Fund, after its banking sector imploded late last year.But it had to take a $10bn (£6.8bn) rescue package, led by the International Monetary Fund, after its banking sector imploded late last year.
The government resigned after months of street protests and was replaced with an interim coalition. The centre-right government resigned in January after mass street protests and was replaced with an interim coalition.
Iceland used to be known for its volcanoes, cod fishing and a high standard of living, based upon booming financial industries.
That all changed late last year.
The global financial crisis led to a collapse of banks that had over-extended themselves.
The government had to step in to nationalise what remained of them, as the currency nosedived and the government went to the IMF for an emergency bail out.
Challenges aheadChallenges ahead
class="" href="/1/hi/world/europe/7859258.stm">Profile: Johanna Sigurdardottir Voting across the country began at 0900 GMT and was due to end at 2200 GMT.
For months, demonstrators took to the streets of the capital, Reykjavik, banging pots and pans and calling for the government to resign. Opinion polls suggest that the two parties in the caretaker government - the Social Democratic Alliance and the Left Green Party - will gain most votes.
That happened in January, with a coalition government led by Johanna Sigurdardottir stepping in until this weekend's elections. If the centre-left parties win as expected, it would be an electoral rebuke to the leading centre-right Independence Party, which led the government that resigned in January.
Whoever wins will face many challenges, centred around the economy. But whoever wins will face many challenges, centred around the economy, the BBC's Nicholas Walton says.
It needs rebuilding, with financial services no longer at its core. Unemployment and the government's ruined finances also need attention. It needs rebuilding, with financial services no longer at its core. Unemployment and the government's ruined finances also need attention, our correspondent says.
There is also the question of whether or not to apply to join the European Union.There is also the question of whether or not to apply to join the European Union.
In the past, Icelanders felt that they were better off outside the EU.In the past, Icelanders felt that they were better off outside the EU.
But the financial crisis has changed opinions. Now, many see EU membership or adopting the Euro as Iceland's currency, as part of the solution to the country's problems. But the financial crisis has changed opinions, our correspondent says. Now, many see EU membership or adopting the Euro as Iceland's currency, as part of the solution to the country's problems.
Difficult choices lie ahead.