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Iceland commerce minister resigns

Geir Haarde (left) speaks to Bjorgvin Sigurdsson (9 October 2008)
Mr Sigurdsson (r) admitted Icelanders had lost faith in the government

Iceland's Commerce Minister, Bjorgvin Sigurdsson, has announced his resignation, saying he wanted to take responsibility for the economic crisis.

Mr Sigurdsson becomes one of the world's first politicians to step down as a result of the global crisis.

On Friday, PM Geir Haarde called an early general election and said he would step down for health reasons.

Iceland's financial system collapsed in October under the weight of huge debts built up during years of rapid growth.

The country's currency has since plummeted, while unemployment - once close to zero - is soaring. The economy is forecast to shrink by 9.6% this year.

In a series of increasingly frequent demonstrations, protestors have accused the government of leading the island into economic ruin.

The Icelandic prime minister's car is attacked by anti-government protesters

On Wednesday, people surrounded Mr Haarde's car outside the government building in Reykjavik, banging on the vehicle's windows and pelting it with eggs.

Announcing his resignation on Sunday, Mr Sigurdsson acknowledged that Icelanders had lost faith in their government and political system.

"I want to shoulder my part of the responsibility for that," he told reporters.

"The anger and distrust of the public is too deep for me to be able to regain their trust," he added. "This will not be regained until changes in key institutions have been made."

Mr Sigurdsson said the chairman and director of the Financial Supervisory Authority, which oversaw the nationalisation of Iceland's three main banks last year, also bore responsibility and would resign.

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