| | Iceland makes history as lesbian Prime Minister takes office
 REYKJAVIK (AFP) — Crisis-hit Iceland's first woman and first openly gay premier took power Sunday as her new left-wing coalition government started attempts at digging the country out of economic meltdown.
"I was today asked by the president of Iceland to finish forming the government, which has succeeded. That government will be based on new social values," said Prime Minister Johanna Sigurdardottir.
"For the short time this government will exist, we will emphasise assistance to businesses and families," added Social Democrat Sigurdardottir.
The 66-year-old, who married her companion Jonina Ledsdottir in 2002, officially took the reins when she sat down to start a meeting of her cabinet with President Olafur Ragnar Grimsson on Sunday evening.
Her interim minority coalition -- which also includes the Left Green party and two independent ministers -- replaces outgoing prime minister Geir Haarde's right-left coalition.
Haarde's government was forced to resign on January 26 following months of increasingly violent protests over the devastating impact of the global economic crisis.
Thousands of Icelanders lost their savings and jobs after the country's once-booming financial sector crumbled in October, with Reykjavik forced to nationalise its major banks as the country's currency nosedived.
Sigurdardottir, 66, is one of Iceland's most experienced politicians and served as minister of social affairs in the outgoing government.
While she has never hidden her sexuality, Sigurdardottir has never discussed it in public. Many Icelanders only learned of her homosexuality when her name emerged as the possible future prime minister.
She is believed to be the modern world's first openly gay government head.
Following a meeting with her earlier in the day, head of state Grimsson told reporters he was thrilled about the appointment.
"I would like to declare special pleasure with my decision today to give Johanna Sigurdardottir this assignment by which she becomes the first Iclendic woman to become the prime minister of Iceland," he said.
Shortly before his resignation, Haarde called snap elections for May 9, which both the Social Democrats and the Left Greens have proposed are brought forward to April 25.
"All the ministers in my government will have to work quickly and firmly" to bring the economic situation under control, Sigurdardottir told reporters, adding that one of the coalition's first moves would be to replace the central bank's board of governors.
Angry protests have also called for central bank chief David Oddsson to stand down. Oddsson liberalised the country's financial markets when he was prime minister in the 1990s.
A country of just 320,000 people, Iceland was until the crisis one of the most prosperous members of the Organisation for Economic Co-operation and Development.
Over the past decade, Iceland posted average annual growth of four percent, peaking at 7.7 percent in 2004. In 2007, it registered growth of 4.9 percent.
But the Icelandic economy is now expected to shrink by 9.6 percent this year, while unemployment -- once almost unknown in Iceland -- is expected to reach 7.8 percent in 2009 and 8.6 percent in 2010.
In November, it became the first western European country to be rescued by the International Monetary Fund since Britain in 1976, receiving a 2.1-billion-dollar (1.64 billion euros) loan from the international body, on top of a 2.5-billion-dollar loan from Nordic neighbours Denmark, Finland, Norway and Sweden.
"It is fundamental that we will follow and protect the IMF programme," Sigurdardottir said Sunday.
Other policy changes would include changes to personal bankruptcy laws, quickly revamping the major banks so they could again begin lending and changes to voting laws.
This video is from BBC, broadcast Feb. 1, 2009.
Download video via RawReplay.com
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