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Iceland's senior minister resigns as government becomes first global political casualty of the credi
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Iceland's Minister of Commerce Bjorgvin Sigurdsson has resigned, two days after the prime minister announced his own departure due to pressures from the island nation's economic collapse.

Mr Sigurdsson, a member of Iceland's junior Social Democrat coalition party, made the announcment at a news conference this morning.

'I have decided to do this to take responsibility,' he said.

Prime Minister Geir Haarde shocked the country on Friday when he said he would not seek re-election and called for a general election on May 9. 

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Crunch victims: Bjorgvin Sigurdsson (left) has joined Prime Minister Geir Haarde, and resigned in response to the economic crisis and increasing dissent


The government of Iceland became the first in the world to be effectively brought down by the credit crunch.

It came after several nights of rioting over the financial crisis.

A poll would not normally be held until 2011.

Mr Haarde also revealed that he had been diagnosed with a malignant tumour of the oesophagus and would not seek re-election.

'I have decided not to seek re-election as leader of the Independence Party at its upcoming national congress,' he told a news conference.

The global financial crisis hit Iceland, which has a population 320,000, in October, triggering a collapse in its currency and financial system under the weight of billions of dollars of foreign debts incurred by its banks.

Enlarge   Protesters clash with police in Reykjavik during a demonstration against the Icelandic government's handling of the country's financial crisis

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Protesters clash with police in Reykjavik during a demonstration against the Icelandic government's handling of the country's financial crisis


The economy is set to shrink 10 percent this year and unemployment is surging.

Critics wanted Mr Haarde, the central bank governor and other senior officials to resign.

Some senior figures in his party have also said they favour an early election, but Mr Haarde had up to now vowed to defy plunging popularity and stay on.

Protests had been held weekly since the crisis broke last year, but since Tuesday have been held every night.

On Thursday, police used teargas on demonstrators for the first time since protests against the North Atlantic island's entry into the NATO alliance in 1949.

Special forces had to rescue Mr Haarde from his car after he was surrounded by an furious mob hurling eggs and cans outside the government offices, in Reykjavik.

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Riot police huddle together as projectiles are thrown at the Parliament building behind them in downtown Reykjavik


Riot police huddle together as projectiles are thrown at the Parliament building behind them in downtown Reykjavik

The seething crowd spattered the building with paint and yoghurt, yelling and banging pans, hurling fireworks and flares at the windows and even lighting a fire in front of the main doors.

'There were a couple of hundred (protesters) when they had to use the gas,' police spokesman Gunnar Sigurdsson said. 'It went on for two hours or so. There were no arrests. Some injuries, but not serious.'

Latvia, Bulgaria and other European countries hit hard by the global economic meltdown have also seen unrest.

Protesters carry a placard of Iceland's Justice Minister Bjorn Bjarnason and a sign reading 'death power' during demonstrations

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Protesters carry a placard of Iceland's Justice Minister Bjorn Bjarnason and a sign reading 'death power' during demonstrations


By Graham Smith

Source >
  Daily Mail | Jan 25


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