24 Nov 2008

Icelanders demand PM resignation as protests swell

7:06 pm on 24 November 2008

Thousands of Icelanders demonstrated in Reykjavik on Saturday demanding the resignation of Prime Minister Geir Haarde and Central Bank governor David Oddsson for failing to stop a financial meltdown in the country.

It was the latest in a series of protests in the capital since the financial meltdown that crippled the island's economy.

Protest organiser Hordur Torfason said the rallies would continue until the government stepped down.

"They don't have our trust and they are no longer legitimate," Torfason said as the crowds gathered in the drizzle before the Althing, the Icelandic parliament.

Iceland's three biggest banks - Kaupthing, Landsbanki and Glitnir - collapsed under the weight of billions of dollars of debts accumulated in an aggressive overseas expansion, shattering the currency and forcing Iceland to seek aid from the International Monetary Fund.

This week, the North Atlantic island nation of 320,000 secured a package of more than $US10 billion in loans from the IMF and several European countries to help it rebuild its shattered financial system.

Despite the loans, Iceland faces a sharp economic contraction and surging unemployment while many Icelanders also risk losing their homes and life savings.

Opposition parties tabled a no-confidence motion in the government on Friday over its handling of the crisis, but the motion carries little chance of toppling the ruling coalition which has a solid parliamentary majority.