Iceland’s coalition government has collapsed and Prime Minister Geir Haarde will be stepping down along with his cabinet. This comes shortly after the Icelandic Finance Minister Bjorgvin Sigurdsson stepped down. Coming hard on the heels of the Prime Minister calling an early election in May, the dismal and rapidly worsening economic conditions in Iceland have resulted in the opposition parties calling for an end to the current government’s mandate. Mr. Haarde did not meet the demands of the opposition when they called for the stepping down of the Icelandic central bank. This will most likely lead to a hasty election wherein Mr. Haarde will not be running due to a malignant tumour in his throat.

There is also the possibility of a coalition minority government forming between the main opposition parties, the Left-Green, Liberal and Progressive parties, with support of the small Center Party necessary to uphold the government. Iceland was the canary in the coal mine for the current economic crisis. After years of speculative currency investment from other states resulted in a year after year growth of the Icelandic economy. When the collapse of multiple Wall Street firms resulted in the increase of turmoil in the global markets Icelands unstable Krona was one of the first currencies to crash, as well as the one which has been hardest hit, at least in the economies of the developed world.

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