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After fleeing the government building, Haarde went to a meeting of Independence party MPs at their headquarters. He later emerged to insist that he could hold the coalition together.
Protesters have been rallying outside the parliament since October, when the credit crunch ripped the heart out of Iceland's financial system.
The protesters have begun referring to their daily attempt to oust the government as a "fleece revolution", because of the sweaters worn.
The latest protest rally is thought to be the biggest since 1949, when Iceland joined Nato. On Tuesday night, the crowds lit a bonfire and once it ran out of fuel, the Christmas tree in the town square was torn down and used as firewood. Nearby benches were also thrown into the pyre.
Originally posted by Anonymous ATS
reply to post by RolandBrichter
Does anyone else think Iceland is kind of the Guinea Pig for the bigger countries like the US, UK and Mainland Europe? Almost like an experiment. It's like it's a practice run, ruin the economy, crash the banks and observe the effect on a small scale.