LONDON (MarketWatch) - Iceland's coalition government fell apart Monday, Prime Minister Geir Haarde announced Monday, succumbing to a financial crisis that's wrecked the tiny, North Atlantic island nation's economy.
The decision follows Haarde's announcement last week for early elections on May 9. Haarde at the time also said he wouldn't run due to health elections.
Monday's announcement followed unsuccessful talks between the coalition partners made up of Haarde's Independence Party and the Social Democrats.
Iceland fell into crisis last October as its once-vibrant banking sector collapsed, sending its currency into a nosedive and unemployment soaring.
The International Monetary Fund in November approved a two-year, $2.1 billion loan for Iceland. The country has also secured loans from other countries.
This is sad and alarming, even though Skarpi told us about the banks earlier. I hope Skarpi and his family will be all right.