A loud demonstration took place outside the National Theater yesterday evening where the Social Democrat faction of Reykjavík held a meeting, deciding afterwards that the coalition with the Independence Party in Iceland’s government should be terminated.

The Reykjavík faction is urging their party’s leadership to take that step immediately, form a new government which would rule temporarily until new elections would be held, no later than in May this year, Morgunbladid reports.

The current leaders of Iceland's government: Prime Minister Geir H. Haarde of the Independence Party (left) and Foreign Minister Ingibjörg Sólrún Gísladóttir of the Social Decmorcrats. Copyright: Icelandic Photo Agency.

According to Fréttabladid, both vice-chairman of the Social Democrats Ágúst Ólafur Ágústsson and party group chairman Lúdvík Bergsson agree with the Reykjavík faction that elections should be held next spring and, in fact, the majority of the party’s members nationwide are also of the same opinion.

Chairman of the Progressive Party Sigmundur Davíd Gunnlaugsson said his party is prepared to stand by a minority coalition between the Social Democrats and the Left-Greens provided there will be elections before the end of April.

While the Social Democrats did not express interest in such a coalition, chairman of the Left-Greens Steingrímur J. Sigfússon welcomed the idea.

Prime Minister and chairman of the Independence Party Geir H. Haarde claimed it would be unwise to have new elections in spring, arguing that the government is preoccupied with working on important projects.

Haarde stated that he had talked with Foreign Minister and chairman of the Social Democrats Ingibjörg Sólrún Gísladóttir, who is on sick leave, yesterday and that she had confirmed to him that their coalition was not in danger.

The Independence Party also held a meeting yesterday, discussing the many aspects of the current situation in society.

Although most Independence Party MPs agree that it would be irresponsible to have new elections now, some of say it is necessary to set a date to calm the situation.

Haarde said on RÚV’s news magazine Kastjós last night that he has nothing against having general elections next winter.

The PM has been criticized from members of his own party, among others, for not going in for changes in the boards of the Central Bank and the Financial Supervisory Authority (FME).