Crisis-stricken Iceland votes as left tipped to win poll

Iceland voted yesterday in a poll seven months after its economic collapse, with the pro-EU leftist interim government tipped to win as voters were expected to snub the party blamed for the crisis.

With 228,000 eligible voters, Icelanders cast their ballots in chilly springtime weather, as the daily Morgunbladid declared in an editorial that "rarely before has there been more at stake in general elections."

"The future of the nation is at stake, whether it will rise again from the recession," it said.

Voters were expected to give the cold shoulder to the conservative Independence Party that was in power for 18 years until it resigned in January amid massive protests over the crisis that brought Iceland to the brink of bankruptcy.

Public opinion polls have suggested a comfortable victory for the pro-EU Social Democratic Party, led by Prime Minister Johanna Sigurdardottir, and its junior coalition partner the Left Green Movement.

Voter turnout was reported to be high mid-way through the polling hours. Polls were set to close at midnight and preliminary estimates were due shortly afterwards, with final results expected early today.

Political observers have predicted a "disaster" for the Independence Party, which was in government in the early 1990s when the financial markets were deregulated and has been blamed for the country's dire straits.

But party leader Bjarni Benediktsson, elected less than a month ago to replace former prime minister Geir Haarde, told AFP he was optimistic as he voted at the Fjolbrautaskoli school outside Reykjavik.

"I think we will get better results than what the polls showed," he said.

Three surveys published on Friday showed the Independence Party taking between 21.9 and 23.6 per cent of votes, suggesting its worst electoral showing since its 1987 score of 27 per cent.

The Social Democrats were tipped to garner between 29.2 and 31.8 per cent of the vote, while the Left Greens were credited with 24.1 to 27.2 per cent - enough for the two parties to obtain a majority.

"There are many things we have to do. We have been working for the last two or three months to get the country going," Sigurdardottir, who took over in February, said as she voted in central Reykjavik.

"We were the first nation to collapse during the crisis, but we will be the first nation to emerge from the crisis," she later told a press conference.

While Icelanders had enjoyed a standard of living envied by the rest of Europe, the collapse of the country's oversized financial sector amid the global crisis that erupted last year has had a devastating impact.