Iceland Names Sigurdardottir As PM In New Govt

The parties said they could aim to stage an early parliamentary election on April 25.

 Iceland's new prime minister will be former Social Affairs Minister Johanna Sigurdardottir, parties forming a new coalition decided on Sunday.

Social Democrat Sigurdardottir will be joined by new Finance Minister Steingrimur Sigfusson, leader of coalition partner the Left-Green Party, the parties told journalists.

The previous prime minister, Geir Haarde, resigned on Monday after weeks of anti-government protests, the first leader to fall as a direct result of the global economic crisis.

"The government inherits enormous difficulties due to the banking and systemic collapse as well as considerable and rapidly increasing foreign debts and liabilities of the national economy," the new coalition said in a statement.

It said its priorities included replacing the board of governors of the central bank, criticised for failing to prevent the crisis, and to mandate a parliamentary committee to look at the possibility of entering the European Union.

It said the committee would deliver a report by April 15.

The credit crunch that triggered the crisis hit Iceland hard and fast. Its rapidly expanding banks collapsed under a weight of debt, the currency collapsed and the country was forced to take a $10 billion International Monetary Fund-led rescue package, causing widespread anger.

The coalition said: "The economic policy of the government will be based on the programme already established by the authorities and the International Monetary Fund."

The parties said they could aim to stage an early parliamentary election on April 25.