1 Feb 2009

Interim govt to take office in Iceland

9:02 am on 1 February 2009

A new interim coalition government is set to take office in Iceland on Sunday. It will propose 25 April as the date for an early election.

The Left-Green party is forming a coalition with the Social Democrats who will be the senior partner.

The Progressive party said on Saturday it would support the minority coalition in parliament.

The previous government quit last week as a direct result of the global financial crisis.

Prime minister Geir Haarde resigned on Monday and will not seek re-election.

Iceland had to accept a $US10 billion rescue package from the International Monetary Fund after the country's banks collapsed. There is widespread anger at the crisis.

There have been weeks of protests which eventually turned violent. Some 2,000 people again demonstrated outside parliament on Saturday.