Iceland's PM calls for new election after junior partner quits gov't

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Iceland's prime minister on Friday called for a second snap election in less than a year after a party quit the coalition government because he hid his father's involvement in seeking a clean record for a convicted paedophile.

He said he would be looking to hold the election in November though that would mean it would not be possible to finish next year's budget.

"It came as a considerable disappointment that we seem to be in the same place as after the general elections in 2016", Benediktsson told a news conference in the capital, Reykjavik.

"In light of the situation, the Reform party believes the right thing to do is to call an election immediately", they wrote. "It is impossible to put together a strong majority government which is what Iceland needs now".

That's what caused Benediktsson's allies in the Bright Future party to withdraw support from the coalition government, causing the prime minister to lose a majority in Parliament and prompting the call for a new election.

"I was shocked to hear that".

Mr Sveinsson has confirmed he signed a letter supporting his friend's application to have his "honour restored" by Iceland's judicial system.

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Mr Sveinsson's friend Hjalti Sigurjon Hauksson was sentenced to five years in prison in 2004 for repeatedly raping his stepdaughter for 12 years since she was five.

The Icelandic crown fell roughly 1 percent against the euro and the dollar on Friday as a scandal involving the father of the country's prime minister left the government on the verge of collapse.

The country's previous government was toppled by the Panama Papers scandal over offshore tax havens.

The current coalition was formed in January after two months of negotiations as the Independence Party, which resisted a challenge from the populist Pirate Party to win the most votes in an October 29 snap elections, replaced its traditional coalition party, the Progressive Party, with the two new junior allies.

The centrist Bright Future Party, which had four seats in Iceland's parliament, the Althini, said in a Facebook post that there was "a serious breach of trust" behind its withdrawal.

"I consider it a sign of weakness by those who desert [the government]", he said. The law was introduced in 1940 and was originally created to restore convicted criminals' right to vote.

The law requires letters of support from persons of outstanding character to expunge a criminal's record.

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