INSTANT VIEW: Iceland PM says coalition government has fallen

REYKJAVIK (Reuters) - Iceland's prime minister, Geir Haarde, said he would hand in his resignation to the president later on Monday as his coalition government fell apart amid protests over its role in the island's economic collapse.

The announcement came only days after Haarde shocked the country with the news he would not seek re-election because he has cancer, and proposed an early parliamentary election in May.

Following are views from analysts on the news:

CARL HAMMER, FX STRATEGIST, SEB

"This was perhaps not a great surprise. There has been widespread discontent for some time, though protests have become more violent from a population which has acted in a more civilized fashion in the past."

"I think we will see more pressure on those responsible at the central bank. There has been talk for quite some about the central bank chief also having to go."

MICHAEL GANSKE, HEAD OF EMERGING RESEARCH, COMMERZBANK

"This will obviously increase volatility because it is unclear who will be running the new government or how the political situation will change."

"But already the country is in a deep economic crisis and they have got the money from the IMF so they are already bound (by the terms of the IMF deal). It is a legal commitment."

"It will be very interesting to see in the election campaign how the economic crisis will be used to gain some votes."

"But it's not like we are talking about a country with a highly successful political history. I would say it is short-term volatility, but will not have a huge impact."

LARS CHRISTENSEN, HEAD OF EMERGING RESEARCH, DANSKE BANK

"This is not unexpected and at least it is the end of the pain politically. I would view it as good news because it should give us more clarity rather than less. Obviously, the left wing is likely to get a very good showing in the election."

"The likely verdict of the Icelandic people is that they will want the current government well out of the way."

"I would hope that any new government would stick with the current IMF deal because otherwise the future for Iceland is even bleaker economically."

"There is also a strong political risk that you will see much more intervention and control in the economy and that people will draw the wrong conclusions from the crisis."

"You could see the sort of intervention and control you saw during the 1970s and '80s when Iceland was doing very badly in terms of unemployment and inflation."