Iceland opposition calls no confidence vote

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Iceland's parliament was to vote Wednesday on a no confidence motion against the government after its plan to repay foreign creditors of the failed Icesave bank was rejected in a referendum.

Iceland's largest opposition party, the centre-right Independence Party which ruled the country for most of the past century, called late Tuesday for a vote of no confidence against Prime Minister Johanna Sigurdardottir's leftist government, saying it wanted new elections.

"It is in the best interest of the nation that elections will be held as soon as possible," party chief Bjarni Benediktsson said in a parliamentary address broadcast by public television station RUV.

New elections were needed, he insisted, to "ensure that the people of this country can trust their MPs to deal with the matters at hand."

The demand came after nearly 60 percent of Icelandic voters at the weekend rejected a government and parliament-backed plan to refund 3.9 billion euros ($5.6 billion) to Britain and the Netherlands for money they spent on compensating 340,000 of their citizens who lost money on Icesave.

The online bank went under at the height of the global financial crisis in 2008.

The result -- the second referendum rejection of a repayment plan in just over a year -- has embarrassed the majority government in Reykjavik, after the parliament had approved the plan with a 70 percent majority.

Prime Minister Sigurdardottir welcomed Benediktsson's proposal.

"On multiple occasions the opposition has stated its distrust without ever following through," she said, congratulating the Independence Party for "manning up enough to (finally) put in a no confidence proposal against the government."

Parliament will begin debating the no confidence proposal at 1600 GMT, and a vote is expected at around 2100 GMT.

Since achieving independence from Denmark in 1944, 14 proposals of no confidence have been presented in Iceland. They were all rejected.

© 2011 AFP

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