Iceland names first openly gay Prime Minister

REYKJAVIK, Iceland (Observer Update) - Iceland named its prime minister and finance minister on Sunday (Feb. 1) in a new centre-left coalition that vowed to overhaul the central bank and look at membership of the European Union to ease a financial crisis, Reuters reported on pageoneq.com.

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. Its rapidly expanding banks buckled under a weight of debt, the currency collapsed and the country was forced to take a $10 billion International Monetary Fund-led rescue package, causing widespread anger.

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

"The economic policy of the government will be based on the programme already established by the authorities and the International Monetary Fund," it said in a statement.

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 government inherits enormous difficulties due to the banking and systemic collapse as well as considerable and rapidly increasing foreign debts and liabilities of the national economy," the new coalition said in a statement.

It said 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.

It said the committee would deliver a report by April 15.

The government also said it aimed to hold a parliamentary election on April 25, a major demand of protesters.

In Iceland, the president has the job of giving politicians the mandate to form a new government. Any handover of power also takes place via the president. The old and new government will return later to the president for the formal handover of power.

Sigurdardottir was welfare minister in the former government and is set to become the first openly gay leader in the world. (