Iceland’s main ruling party, struggling to overcome a catastrophic economic crisis, said it expected early elections this year, after a day of violent anti-government protests.
Prime minister Geir Haarde has so far vowed to stay on, saying a snap election would disrupt efforts to stabilise an economy rocked by the collapse of its banks last year following a decade-long boom fuelled by cheap foreign funding.
However protests turned violent yesterday, with demonstrators wanting Mr Haarde, the central bank governor and other senior officials to quit, accusing them of “incompetent rule” and cosy ties to the business elite.
Independent Party deputy leader Thorgerdur Gunnarsdottir told parliament that the party expected an election this year, two years ahead of time.
Independent Party parliamentarian Illugi Gunnarsson said it was “obvious” that early elections would take place, but that the party had not discussed any specific dates. “Whether the elections will be this September, October or in May [2010], the most important thing right now is to get the wheels of the economy rolling again,” Mr Gunnarsson said.
Mr Haarde’s office declined to comment on election issues and he did not mention early elections during a speech to parliament yesterday on measures to bolster the economy.
Overnight, police used tear gas against demonstrators for the first time in Iceland since protests over the Atlantic island’s entry into the Nato military alliance in 1949.
On Thursday afternoon, about 80 protesters stood outside parliament, chanting for the “disqualified government” to resign. Latvia, Bulgaria and other European countries hit hard by the global economic meltdown have also seen unrest.
Police spokesman Gunnar Sigurdsson said of the situation overnight: “There were a couple of hundred [protesters] when they had to use the gas. It went on for two hours or so. There were no arrests, some injuries, but not serious.”
Besides its economic woes, Iceland also faces a strategic long-term question over whether to join the European Union or remain outside. The crisis has buoyed public support for joining the EU and adopting the euro currency.
Iceland’s economy is set to shrink 10 per cent this year and unemployment is surging. To stay afloat during the worst of the crisis, Iceland negotiated a $10 billion aid package crafted by the IMF and effectively froze trade in its hobbled currency. – (Reuters)