STOCKHOLM (Reuters) - Iceland's Independence Party said on Friday its leader, Bjarni Benediktsson, has begun discussions with the Reform Party and the Bright Future party about forming a new government.
The Independence Party won 21 seats in last month's general election, making it the largest party. The Reform Party - which was founded earlier this year - won seven seats and the Bright Future four, giving the three parties a bare majority in the 63-seat house.
"This afternoon Bjarni went to meet the President and informed him that on the basis of conversations with leaders of the Reform Party and Bright Future they have today decided to formally begin discussions about forming a government," the Independence Party said in a statement.
The Independence Party was a junior member of the former government and has been part of every government between 1980 and 2009 and again from 2013.
It presided over the privatization of banks, the liberalization of the financial sector and its demise, and the country's eventual economic recovery from its 2008 crisis.
(Reporting by Stockholm Newsroom, editing by Larry King)