New Icelandic government to take office today

February 1, 2009 The newly formed Icelandic coalition interim government will take office today, according to a coalition leader. The new government will also include a new prime minister, Jóhanna Sigurðardóttir, the country's and the world's first openly gay prime minister.

"If everything goes as planned now a new government will take over [this] afternoon," said Steingrimur Sigfusson, who heads the Left-Green Movement.

On January 27, it was announced that the nation's coalition government had collapsed and dissolved following a banking financial crisis. In October of 2008, Iceland's banking sector collapsed and was largely nationalised. Iceland's interest rate is now 18%, with GDP expected to fall 9.6% this year. Inflation has reached 13.1%. Just before the announcement of the government taking office, nearly 1,500 people were protesting outside the parliament building over the collapsed government and the recent financial crisis, but protesters seemed happy about the change.

"The demands of the people have been met. Therefore today is a celebration," said protest organizer Hordur Torfason to the crowd who were cheering about hearing the news.

The new minority coalition will consist of Jóhanna's Social Democratic Alliance and the Left-Green Movement with backing from the Progressive Party. Jóhanna will be replacing the current prime minister, Geir Haarde who resigned on January 26, and is the chairmen of the nation's independent party and a critic of Jóhanna. He criticizes her appointment because he believes she will not help the economic crisis, resulting in more government spending.

The quick appointment of the new government also means an early election, which is scheduled to take place on April 25.