Iceland's government topples amid financial mess

[Turborama]

Source: AP

By DAVID STRINGER, Associated Press Writer – 5 mins ago ]

REYKJAVIK, Iceland – Iceland's coalition government collapsed Monday, leaving the island nation in political turmoil amid a financial crisis that has pummeled its economy and required an international bailout to keep the country afloat.

Prime Minister Geir Haarde said he was unwilling to meet demands from his coalition partners in the Social Democratic Alliance Party, which insisted upon the post of prime minister in order to keep the coalition intact.

Haarde, who has been prime minister since 2006, said he would officially inform the country's president later Monday that the government had collapsed.

=snip=

Iceland has been mired in crisis since the collapse of the country's banks under the weight of debts amassed during years of rapid expansion. Inflation and unemployment have soared, and the krona currency has plummeted.

Haarde's government has nationalized banks and negotiated about $10 billion in loans from the IMF and individual countries. In addition, Iceland faces a bill likely to run to billions of dollars to repay thousands of Europeans who held accounts with subsidiaries of collapsed Icelandic banks.

Read more: http:http://news.yahoo.com/s/ap/20090126/ap_on_bi_ge/eu_iceland_crisis

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As was predicted this weekend by an Icelandic poster on the videos forum...

[jwirr]

1. I would like to follow what happens to the people there if possible.

I do not have the knowledge to find this myself but it could give us some insight to our future.

[Kipper58]

2. Try this BBC webpage for links

http://news.bbc.co.uk/1/hi/world/europe/7851415.stm

[truedelphi]

4. California is already on the brink

The state is supposedly about to run out of money. Sometime later in the spring of 2009.

This means that in addition to all the other battered industries, the teachers, social workers, accountants employed by the state, fire departments, police departments, etc will all be handing out the pink slips. AFDC, food stamps, the elderly in nursing homes will be affected, all of them at some point.

Since retail stores, the housing market, computer and tech industries are already hemorrhaging jobs and dollars, I have no idea where it will end.

[roguevalley]

9. They live on a volcano and I am sure agriculture is not what it can

be in other places. They must depend a lot on imports. I am worried about them. I like Icelanders, the ones I have met. Hang in there, Iceland.

[robertpaulsen]

3. I doubt they'll be the last government to collapse with this crisis.

Thanks for destroying Iceland, Bush!

[Renew Deal]

5. Picture of unrest in Iceland

[JVS]

13. ROCK!

[B o d i]

6. Paul Krugman (you might have heard of him?) wrote, *last March*...

http://krugman.blogs.nytimes.com/2008/03/31/the-north-atlantic-conspiracy/
The North Atlantic Conspiracy
Is Iceland the victim of a financial conspiracy?

http://krugman.blogs.nytimes.com/2008/04/09/the-plot-against-iceland/
The plot against Iceland

[B o d i]

12. If you want to understand what's happened to Iceland's financial system, read those links.

That's a Nobel Prize winning economist writing about Iceland's economic future, and it seems like he had a crystal ball, considering what's happened since.

[Joanne98]

7. The green/left party is looking good in the polls.

[Barrett808]

8. I wonder if we'll have to evacuate Iceland...

...if they become unable to buy food on world markets, due to insolvency.

[B o d i]

10. They've always got fish. Lots and lots of fish.

They also have geothermal heating, so they won't freeze in the winter, and they have a new gigantic hydro-electric dam, so their lights will stay on.

What they don't have is petroleum products. 100% of that is imported. They do generate their own hydrogen gas though, and even have hydrogen available at the pump in Reykjavik, with plans to develop even more hydrogen infrastructure and eventually become completely energy independent.

[jwirr]

11. All the more reason for us to keep a watch on their progress. They

may well be leading the way. Unfortunately most of us do not have a geothermal source of energy.

[JVS]

14. Iceland has been populated to capacity since the middle ages.

In fact, even then a lot of their economy depended on trade. Since Iceland has become a modern society, I'm pretty sure that their population is higher than their feeding capacity.

[Judi Lynn]

15. Update : Iceland's center-left party to lead interim gov't

Jan 27, 6:50 AM EST
Iceland's center-left party to lead interim gov't

REYKJAVIK, Iceland (AP) -- Iceland's president says he has asked the county's center-left Social Democratic Alliance Party to form a new government.

The announcement Tuesday follows the collapse of the tiny island nation's coalition government a day earlier amid economic crisis and widespread public dissent.

Icelandic President Olafur Ragnar Grimsson has asked Alliance party leader Ingibjorg Gisladottir to create a new coalition with the Left-Green movement.

Gisladottir has said she is likely to appoint Social Affairs Minister Johanna Sigurdardottir as the interim prime minister until new elections are held in May.

http://hosted.ap.org/dynamic/stories/E/EU_ICELAND_CRISIS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2009-01-27-06-50-53