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Iceland's Social Democratic Alliance asked to form government

ICELAND'S President Olafur Ragnar Grimsson yesterday asked the country's center-left Social Democratic Alliance to form a new government, news reports said.

The SDA was chosen to form a new minority coalition with the Left-Green Movement after the previous coalition led by Prime Minister Geir Haarde fell apart on Monday.

"After discussing with all the leaders yesterday, I believe that a government of the Social Democrats and the Left-Green Movement can be formed swiftly," Grimsson told reporters after meeting with the leaders of the two parties.

The SDA is likely to appoint the outgoing Social Affairs Minister Johanna Sigurdardottir as interim prime minister until May, when national elections are scheduled, Ingibjorg Solrun Gisladottir, leader of the party, was quoted as saying.

Haarde, leader of the Independence Party, announced his resignation on Monday after his coalition with the Social Democratic Alliance collapsed.

Last Friday, Haarde called a snap general election for May 9 following weeks of protests in which police used tear gas and clubs to disperse demonstrators. But Haarde himself is unlikely to seek re-election as he has a malignant tumor requiring treatment outside the country.

The next general election was due in 2011, but Haarde has been hard pressed by the country's ongoing economic crisis.

Iceland's economy is expected to contract by 10 percent in 2009following the collapse of the country's currency and financial system last October.


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