Riots in Iceland as government collapses

POLITICS - Iceland's government collapsed today, leaving the country in political chaos amid a recession that has hammered its economy and required an international bailout just to keep the economy afloat.

Riots have gripped the country as people resign, make speeches and argue back and forth over who's fault the government collapse and recession is and squabbling over who should be prime minister.

Prime Minister Geir Haarde said he was unwilling to meet demands from his coalition partners in the Social Democratic Alliance. Haarde has been prime minister since 2006. Haarde had previously said he wouldn't lead his Independence Party into new elections, because he has cancer and isn't likely to live long.

Iceland has been mired in financial crisis since the collapse of the country's banks under the weight of debts amassed during years of rapid expansion. Inflation and unemployment have soared, and the currency, krona, has plummeted in value.

Haarde's government has nationalized banks and negotiated about $10 billion US in loans from the IMF and individual countries. In addition, Iceland faces a bill likely to run to billions of dollars to repay thousands of Europeans who held accounts with subsidiaries of collapsed Icelandic banks.

The country's commerce minister, Bjorgvin Sigurdsson, quit Sunday citing the pressures of the economic collapse. Sigurdsson, a member of the Social Democrats party, said Icelanders had lost trust in their political leadership.

Thousands of rioting Icelanders have joined noisy daily protests in the last week over soaring unemployment and rising prices.