2 Feb 2009

Iceland names new ministers to tackle crisis

9:43 am on 2 February 2009

Iceland has named its prime minister and finance minister in a new centre-left coalition that vowed to overhaul the central bank as it grapples with a financial crisis.

Johanna Sigurdardottir, from the Social Democratic Alliance, will become prime minister to be joined by Finance Minister Steingrimur Sigfusson, leader of coalition partner the Left-Green Party, the parties said.

The credit crunch hit Iceland hard, as its banks buckled under a weight of debt, the currency collapsed and the country was forced to take a $US10 billion International Monetary Fund-led rescue package.

The new coalition said it would follow the economic programme it negotiated with the fund.

The former centre-right prime minister, Geir Haarde, quit on Monday after weeks of anti-government protests. He became the first leader to fall as a direct result of the global crisis.

The new coalition government said in a statement that 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.

The government aims to hold a parliamentary election on 25 April, a major demand of protesters.