New Iceland PM one of youngest heads of states in world

REYKJAVIK (AFP) - Iceland's new Prime Minister Sigmundur David Gunnlaugsson was to take office on Thursday, heading up a coalition government composed entirely of newcomers who have never served in a cabinet.

Mr Gunnlaugsson, of the centrist-agrarian Progressive Party, will thereby become at age 38 one of the youngest serving heads of government in the world.

He will also be the youngest member of Iceland's new government.

An Oxford-educated former journalist, Mr Gunnlaugsson belongs to a new generation of politicians who emerged after Iceland's 2008 financial crisis.

During the crisis he co-founded InDefence, a movement opposed to Britain's and the Netherlands' demands that the Icelandic state compensate Dutch and British account holders who lost their savings in the collapse of the online bank Icesave.

He led the Progressive Party's election victory on April 27, when the left-wing majority government suffered a heavy defeat.

The members of the new government were announced in a statement.

The Progressives, who won 19 of the 63 seats in parliament, will hold five of nine cabinet posts, including two of the most important ones: the foreign ministry which will be headed by Gunnar Bragi Sveinsson, 44, and the agriculture, fisheries and environment ministry, headed by Mr Sigurdur Ingi Johannsson, 51.

The other coalition party, the right-wing Independence Party, which also won 19 seats, will hold the remaining four ministries.

Mr Bjarni Benediktsson, 43, will be the new finance minister, while Ms Hanna Birna Kristjansdottir, 46, will be the new interior minister. The oldest member of the cabinet at 55, is the new health minister, Mr Kristjan Thor Juliusson.

Outgoing prime minister, Social Democrat Johanna Sigudarsdottir, had prior to the election announced her retirement from the age of 70.

The centre-right government calls for an easing of household debt by recovering money from the creditors of Iceland's banks that collapsed in 2008.

It has also called for a simpler tax system and lower tax rates.

In addition, the two parties now in power, both traditional sceptics when it comes to ties with the European Union (EU), have promised a referendum on EU membership, the subject of negotiations with Brussels since 2010.