Q+A-What will Iceland's early election mean?
STOCKHOLM Jan 23 (Reuters) - Iceland is to hold early election amid growing protests over the coalition government's failure to avert a financial collapse that has left the island's economy in tatters.
Below are some questions and answers on what happens next:
WILL THERE BE A SNAP ELECTION AND WHEN?
With leaders of both coalition parties coming out in favour, remaining doubts about an early election have been removed.
Prime Minister Geir Haarde, who has cancer and is stepping down, suggested a date of May 9. To call an election much earlier would give a new party leader little time to find his or her feet. Ingibjorg Gisladottir, who is foreign minister and heads the junior coalition party, has called for an election in 'spring', and May would fit in with this.
WHO IS LIKELY TO WIN?
Support for the two coalition parties -- Haarde's Independence Party and Gisladottir's Social Democratic Alliance -- has dwindled and is not currently enough to give them a new majority, a poll this week indicated.
The poll put support for the Independence Party, for decades the biggest and most influential party, at 24.3 percent, down from 36.6 percent in the last election, while the Social Democrat Alliance polled 16.7 percent, down from 26.8 percent.
If an election were called now, the opposition Left-Green Party would become the biggest party, with 28 percent, twice as much as it won in 2007, the Market and Media Research survey indicated.
Support for the other main opposition party, the Progressive Party, partner of Independence in a previous coalition, stood at 17.2 percent, up from 11.7 percent.
WHO MIGHT FORM A NEW GOVERNMENT?
As no party is likely to win an overall majority, a new coalition is all but certain.
However, its likely composition is unclear as Iceland has no tradition of the bloc politics seen in some Nordic countries, where power has shifted between fairly rigid right-wing and left-wing coalitions.
Recent opinion polls indicate that the Left-Green Party, currently in opposition, is best placed to head a new coalition.
HOW WILL AN ELECTION AFFECT THE ECONOMY?
Of pivotal importance is a $10 billion loan package put together by the International Monetary Fund with contributions from a string of European countries.
The Left-Green Party has said it wants to reject the loans from the IMF itself, which total $2.1 billion, and return funds that have already been received.
However, it is uncertain how this might be carried out or financed. The other main political parties largely back the loan package.
WHAT ABOUT EU ACCESSION?
Fiercely protective of the fishing rights that are a pillar of its economy, Iceland has chosen to stay out of the European Union. But public support for membership talks, at least, soared in the wake of the financial collapse.
However, a Capacent Gallup poll published on Friday found that only 38 percent wanted to join the EU, compared to more than 50 percent in October, at the height of the crisis.
It found that 56 percent were nevertheless in favour of beginning accession talks, though this was also down sharply.
The Social Democrats and the Progressives are in favour of accession talks and have said a referendum on joining the bloc should be held.
The Independence Party remains opposed to EU membership, but its historically fierce opposition has been tempered by the financial meltdown, and it is likely to revisit the issue at a national congress, now due to be held in late March.
The Left-Green Party opposes EU membership, but has said it would welcome a referendum. (Reporting by Niklas Pollard; Editing by Kevin Liffey)
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