U.S. Markets

Iceland's president asks leftist opposition leader to form new government

REYKJAVIK (Reuters) - Iceland’s president asked the leader of the Left-Green Movement, Katrin Jakobsdottir, on Thursday to form a new government, although it came second in Saturday’s parliamentary election.

The mandate deals a blow to Prime Minister Bjarni Benediktsson of the Independence Party who called the snap election in September after less than a year in office as a scandal involving his father prompted a government ally to drop out of his ruling coalition.

The Nordic island of 340,000 people, one of the countries hit hardest by the 2008 financial crisis, has seen an economic rebound spurred by a tourism boom. But a string of political scandals have hurt trust in government in recent years.

The election result showed a Left-Green-led coalition was possible if they joined forces with the Social Democrats, the Progressive Party and the Pirate Party. Together, they would hold 32 of parliament’s 63 seats.

Jakobsdottir’s has said she may try to form a broad-based government.

The Independence Party, which has dominated Icelandic politics for decades, fell short of a parliamentary majority.

(This version of the story corrects the prime minister’s first name in paragraph 2 to Bjarni, not Bjarne)

Reporting by Elias Thorsson; writing by Jacob Gronholt-Pedersen; Editing by Matthew Mpoke Bigg