New government takes office in crisis-hit Iceland - WMC Action News 5 - Memphis, Tennessee

New government takes office in crisis-hit Iceland

REYKJAVIK, Iceland (AP) - A new center-left government took office in crisis-hit Iceland Sunday, headed by the country's first openly gay national leader.

Prime Minister Johanna Sigurdardottir and her Cabinet were officially appointed by the head of state, President Olafur Ragnar Grimsson, after a tumultuous week that saw Iceland's previous conservative government collapse over the country's economic meltdown.

Sigurdardottir said one of her first acts "will be to change the leadership of the central bank."

Central bank governor David Oddsson, a former prime minister, is disliked by many Icelanders, who say authorities helped cause the economic crash by failing to rein in reckless banks and businesses.

Sigurdardottir, 66, is a former flight attendant and union organizer, and served as social affairs minister in the previous government.

She is Iceland's first female prime minister, and her Cabinet is the country's first to be split evenly between men and women.

Sigurdardottir also is the first openly gay national leader of modern times, apart from Per-Kristian Foss, a Norwegian politician who briefly served as his country's prime minister in 2002.

The new government is a coalition of Sigurdardottir's Social Democratic Alliance and the Left-Green movement, and will hold office until elections April 25.

The new Cabinet has 10 posts, down from 12, with four going to each of the coalition partners and nonpolitical experts serving as ministers of business and justice.

Left Green leader Steingrimur Sigfusson is the new finance minister, signaling an economic swerve to the left after years of conservative rule.

"Today, laissez-faire economic policy leaves Iceland, which is severely wounded after years of it running the government," Sigfusson said.

In a statement, the new government said it would conduct "a prudent fiscal policy" and protect the welfare state.

Iceland's conservative prime minister, Geir Haarde, resigned last week after months of angry protest against his government's handling of the economy.

Thousands of angry Icelanders had been demonstrating against Haarde's government for months, clattering pots and kitchen utensils in what some have called the "Saucepan Revolution."

Until recently Iceland - a volcanic North Atlantic island with a population of 320,000 - was one of the world's richest countries, with a rapidly expanding economy. But its banking system collapsed last fall under the weight of huge debts; unemployment is skyrocketing and the country's currency has collapsed.

Iceland has been forced to seek a $10 billion bailout from the International Monetary Fund and individual countries, and momentum is building behind a move to join the 27-nation European Union.

The coalition partners are split on the issue, with the Social Democrats favoring membership and most Left-Greens against it. The new government said it would set up a parliamentary committee to look at the possibility of EU membership and the future of Iceland's battered currency, the krona. It is due to report by April 15.

Sigurdardottir's party also has said it will seek to overturn the previous government's decision, taken last month, to increase Iceland's annual whaling quota from around 50 to about 250 animals per year.

The move could be contentious, as Icelanders look increasingly to traditional industries like whaling and fishing for employment.            

 

(Copyright 2009 by The Associated Press.  All Rights Reserved.)      

Powered by Frankly