Iceland’s government topples amid financial mess, and “Saucepan Revolution.”

By | January 26, 2009

http://xenophilia.com/wp-content/uploads/2009/01/northern-lights-iceland.jpgIceland’s coalition government collapsed on Monday after an unprecedented wave of public dissent, plunging the island nation into political turmoil as it seeks to rebuild an economy shattered by the global financial crisis.

Prime Minister Geir Haarde resigned and disbanded the government he’s led since 2006. Haarde was unwilling to meet the demands of his coalition partner, the Social Democratic Alliance Party, which insisted on choosing a new prime minister in exchange for keeping the coalition intact.

“I really regret that we could not continue with this coalition, I believe that that would have been the best result,” Haarde told reporters.

Iceland has been mired in crisis since October, when the country’s banks collapsed under the weight of debts amassed during years of rapid expansion. Haarde’s government has nationalized banks and negotiated about $10 billion in bailout loans from the International Monetary Fund and individual countries.

The value of the country’s krona currency has plummeted, hitting many Icelanders who took out special loans denoted in foreign currencies for new homes and cars during the boom years. In addition, Iceland must repay billions of dollars to Europeans who held accounts with subsidiaries of collapsed Icelandic banks.

Haarde — a fiscal conservative with degrees from the University of Minnesota, Brandeis and John’s Hopkins — is suffering from cancer and has announced he would not seek another term. He called early elections last week, following mass protests by Icelanders upset at soaring unemployment and rising prices.

Clattering pans and crockery with kitchen utensils, thousands of Icelanders have joined noisy protests against the government’s handling of the economy. The cacophony of kitchenware has led commentators to describe the protests as the “Saucepan Revolution.” …

via The Associated Press: Iceland’s government topples amid financial mess.

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