The leader of Iceland's biggest opposition party wants to renegotiate the terms for the country's $US10 billion aid package if his party wins the election likely in May.
Icelandic Prime Minister Geir Haarde announced on Friday he was stepping down and wanted an early election to be held on May 9. An election would not normally be held until 2011.
Mr Haarde said he was going abroad soon for surgery on a malignant tumour of the oesophagus and would not seek re-election.
Iceland was the first country to fall victim to the global crisis in October when its currency and financial system collapsed under the weight of billions of dollars of foreign debt incurred by its banks.
To stay afloat, it agreed to a $US10 billion aid package crafted by the International Monetary Fund and effectively froze all trade in its currency. Interest rates are now up to 18% and the economy is expected to contract by 10% this year.
Unemployment soars in three months
Since the crisis erupted, unemployment in Iceland, which has a population of 320,000, has risen from practically nothing to 7.8%. This led to protests - which turned violent on Thursday - with demonstrators pressing for Mr Haarde, the central bank governor and other senior officials to quit.
Steingrimur Sigfusson, chairman of the Left-Green Party, says that he wants the election as soon as possible and that he's prepared to become prime minister if his party wins enough support, as recent polls suggest it will.
"Now the people of Iceland have already experienced what some of these conditions mean," Mr Sigfusson says, "so I think we would be supported by many to try and reopen negotiations with the IMF to at least adjust these programmes better to Icelandic needs and circumstances."