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Iceland votes in general election brought on by crisis

world Updated: Apr 25, 2009 07:35 IST

AFP
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Iceland goes to the polls on Saturday in a general election called just months after its economic meltdown, with voters set to snub the party seen as responsible for the crisis in favour of the interim leftist government.

Icelanders are expected to give the cold shoulder to the conservative Independence Party which governed the country for 18 years until it was ousted in January amid massive protests over the crisis that brought Iceland to the brink of bankruptcy.

Public opinion polls have suggested a comfortable victory for the Social Democratic Party, led by Prime Minister Johanna Sigurdardottir, and its junior coalition partner the Left Green Movement.

While Icelanders had enjoyed a standard of living envied by the rest of Europe, the country's heavy reliance on the financial sector meant that the global crisis which erupted late last year had a devastating impact.

The state had to take control of three major banks in October, as the local currency, the Icelandic krona, plunged. Thousands of people lost their savings and their jobs, and unemployment, which was virtually inexistent before the crisis, is expected to hit 10 percent by the end of this year, the central bank says.

The country received a $2.1 billion (1.58-billion-euro) bailout from the International Monetary Fund in November, and some early signs of a recovery have been observed.

Sigurdardottir, who took over in February after the previous government resigned, is a fierce advocate of joining the European Union and adopting the euro, arguing that doing so would shelter the island nation of 320,000 people from the global turbulence.

"EU membership application is a priority issue for the Social Democrats. It is necessary to achieve stability," she said during a final televised debate on Friday.

The Left Greens are however opposed to EU membership, but have insisted on the need for a debate on the issue which deeply divides Iceland amid scepticism that Brussels will interfere with its large fishing industry.

"We are against the EU ... but there are good chances that we can agree on a process which is acceptable to a divided nation on this big issue," Left Green leader Steingrimur Sigfusson said. The two parties have said they plan to carry on their coalition if they win enough votes in the election, and vowed to raise taxes.

"We cannot raise taxes on businesses, but those (people) with the highest income will have to contribute more to society in the coming years," Sigurdardottir said, adding that she also wanted to "get the banks out of public ownership as soon as we can."

The economy and the climate had otherwise been surprisingly absent from the campaign, which appears to have sparked little interest among Icelanders.

Three surveys published Friday showed the Social Democrats garnering between 29.2 and 31.8 percent of voter sympathies, while the Left Greens were credited with 24.1 to 27.2 percent of votes. The Independence Party was meanwhile seen winning between 21.9 and 23.6 percent of votes, suggesting its worst electoral showing since its 1987 score of 27 percent.

Meanwhile, a party formed at the height of the crisis and pushing for democratic reforms, the Civil Movement, has a chance of entering parliament, with polls indicating it could win between 6.5 and 7.1 percent. A party needs 5.0 percent to be represented in the 63-seat parliament, the Althingi.

Some 228,000 voters are eligible to cast their ballots. Polls open at 9:00 am (0900 GMT) and close at 10:00 pm (2200 GMT). Preliminary estimates were due shortly after the end of voting, and final results were expected early on Sunday.