Iceland Minister Quits, PM: Government Could Fall

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

Iceland's Minister of Commerce quit on Sunday, calling into question the government's ability to rule until an early election in May and tackle the country's economic collapse.

Prime Minister Geir Haarde, who has cancer, shocked Iceland on Friday when he said he would not seek re-election due to the pressures of dealing with the crisis. He called an early parliamentary election for May 9.

His commerce minister, Bjorgvin Sigurdsson, said he was resigning because of his role in the collapse that has prompted protesters to call for the government's immediate resignation.

"I have decided to do this to take responsibility," Sigurdsson, a member of Iceland's junior Social Democrat coalition party, told a news conference.

Sigurdsson, 38, said he had called for the management of the Financial Supervisory Authority to step down.

"I realised last night that for me at least there is no going back, the anger and distrust of the public is too deep for me to be able to regain their trust," he said.

Sigurdsson and the Financial Supervisory Authority oversaw the nationalisation of Iceland's main banks, Kaupthing, Landsbanki and Glitnir last year.

Haarde has said he wants to keep running the country until the vote, despite the sometimes violent demonstrations. But he said it was impossible to say if the coalition would hold.

"I know that there are some differences of opinion about the future. Either we will continue with this coalition, or not. I believe that if it is 'not', the situation will only be worse," he told reporters on Sunday.

The government, a coalition between his Independence Party and the Social Democratic Alliance, has been under pressure since the global financial crisis hit Iceland in October.

The credit crunch triggered a collapse in the currency and financial system under the weight of billions of dollars of foreign debts incurred by its banks.

Thousands called on Saturday for the government to step down immediately. Many in the nation of 320,000 have been angry that until this week no senior officials have stepped down.

Protests turned violent in the early hours of Thursday, with demonstrators pressing for Haarde, the central bank governor and other senior officials to go.

Foreign Minister Ingibjorg Gisladottir, leader of the Social Democrats met Haarde on Sunday. Speaking to radio, she called for the resignation of the board and governor of the central bank, saying Sigurdsson's decision turned the spotlight on them.

Gisladottir has also called for an election this spring but has yet to agree a date with Haarde. Polls show both coalition parties trailing the opposition leaders, the Left-Green Party, indicating that a shift in power was likely.