Social Democrats asked to form new government

President Olafur Ragnar Grimsson has asked Iceland's Social Democrats to form a new government, a day after the right-left coalition of outgoing PM Geir Haarde collapsed in the wake of the country's financial meltdown.


AFP- Iceland's Social Democrats entered talks with the Left Greens on Tuesday to build a minority coalition, one day after the government collapsed under the weight of the economic crisis.

The Social Democrats are pushing for Social Affairs Minister Johanna Sigurdardottir to lead a new coalition, which would make her the island's first female and openly gay prime minister.

Outgoing Prime Minister Geir Haarde's right-left coalition, made up of his Independence Party and the Social Democrats, fell apart Monday after months of protests over the collapse of the country's financial sector in October.

President Olafur Ragnar Grimsson asked the Social Democrats on Tuesday to form a new government.

"After discussing with all the (party) leaders yesterday, I believe that a government of the Social Democrats and the Left Green movement can be formed swiftly," Grimsson told reporters after meeting leaders of the two parties.

The Social Democratic Party leader, outgoing Foreign Minister Ingibjorg Solrun Gisladottir, entered into negotiations with the head of the Left Green movement, Steingrimu Sigfusson, at the parliament building in Reykjavik.

"Late tomorrow (Wednesday), and at the latest Thursday morning, we will meet again and discuss the talks between the two parties," Grimsson said.

Gisladottir said she expected a new government to be formed by the weekend, adding: "I don't think this will take long."

Sigfusson, whose party has soared in public opinion polls during the crisis, said: "A conclusion must be reached as soon as possible."

Many Icelanders, thousands of whom have lost their savings and jobs, hold Haarde and central bank chief David Oddsson responsible for the crisis, which forced the state to take control of three major banks as the economy and currency plunged amid huge debts.

The centre Progressive Party, which shared power with Haarde's Independence Party until 2007, has said it would throw its backing behind a minority left-wing coalition.

Gisladottir said Monday she wanted fellow Social Democrat Sigurdardottir, one of Iceland's most experienced politicians, to lead the new government.

The newspaper Frettabladid said the Left Greens would back the choice.

Sigurdardottir would become Iceland's first female prime minister -- though it has had a woman as president in the past -- as well as the country's first openly gay head of government.

Sigurdardottir, 66, married her companion Jonina Leosdottir in June 2002.

Known as a champion of social causes, she has fought for the rights of the handicapped, elderly and disadvantaged in society, and has been nicknamed "Saint Johanna" by the public and colleagues.

A former flight attendant who became a member of parliament in 1978, Sigurdardottir has a reputation for being firm and at times impatient, according to observers.

Though she has never hidden her sexuality, she has never discussed it in public and many Icelanders only learned of it when her name surfaced as the possible future prime minister.

She has two adult children from a previous marriage.

Haarde made no public comments on Tuesday, after meeting with the president on Monday to tender his government's resignation.

Last week, Haarde called snap elections for May 9 but said he would not run for re-election due to health reasons. He has been diagnosed with cancer of the oesophagus.

The election date could change, several newspapers reported Tuesday. The Left Greens have said they want the polls held earlier, possibly in April.

The Social Democrats also reportedly want to hold the general election and a referendum on European Union membership simultaneously on April 30.

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