Iceland's PM calls for election

Iceland became the first government to fall from the global economic crisis today when under-siege prime minister Geir Haarde declared a general election.

Mr Haarde set the date for May 9 but added that he would not seek re-election because doctors found a malignant throat tumour during a routine medical exam last week.

Iceland’s banks collapsed in the autumn under the weight of huge debts, soaring inflation and unemployment, and a plummeting currency, the krona.

The government has responded by nationalising a major bank, seeking help from the International Monetary Fund, slashing interest rates, and taking other measures.

Mr Haarde, prime minister for less than two years, has faced mounting anti-government protests in the last week, with the country’s small parliament building the focus of sometimes violent confrontations.

The prime minister said a regular medical examination last week revealed a small tumour in his throat and that a biopsy had shown it to be malignant.

He said his doctors told him he needed immediate surgery, which would have to be performed outside the country.

Mr Haarde said he was “optimistic” he could overcome the illness but could not be sure he would recover fully.

“It is impossible to exclude the possibility that the situation could take a more negative direction in the longer term,” he said.

“In view of the uncertainty which unavoidably results from the nature of the affliction with which I have been diagnosed, I have decided not to seek re-election as leader of the Independence Party.”

The decision on new elections has yet to be approved by Mr Haarde’s coalition partner, the Alliance Party.

Under Icelandic law, a national election did not need to be called until 2011.

Steingrimur J. Sigfusson, head of the opposition Left-Green party, said his party was pleased with the decision but would like elections held earlier than May.

“Every week is expensive,” he said adding that valuable time is being lost in the effort to reverse the economic collapse.

“This is a great improvement that the government has realised that elections this spring are inevitable,” he said. “I wish the best for the prime minister’s health. But the demands of the people were both for new elections and that the current government would resign, and that demand still stands.”

Demonstrations in Reykjavik have become increasingly confrontational in the last week, with police using tear gas for the first time since 1949 to control rioters in the usually calm and quiet nation.

Protesters have accused the government of leading the formerly affluent country of 320,000 people into financial ruin and despair. Crowds of roughly 2,000 protesters have gathered outside parliament in recent days to denounce the government.