STOCKHOLM (Reuters) - Iceland's president on Wednesday asked the leader of the center-right Independence Party to form a new government after the party emerged on top in a general election on Saturday.
President Gudni Johannesson gave the mandate to Bjarni Benediktsson after the party won the largest share of the vote with 29 percent on a campaign to lower taxes and keep the economic recovery on track.
"My first step is to speak to leaders of other parties," Benediktsson told reporters. "But this can always take some time, in particular when it is clear that it will not be enough to get two parties to form a government."
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 the banks, the liberalization of the financial sector and its demise, and the country's eventual economic recovery from its 2008 crisis.
With voters still angered by the 2008 financial crisis and the naming of several government figures in an offshore tax haven scandal this year, Icelanders looked to oust the center-right coalition in its current form.
But many Icelanders opted for stability and the anti-establishment Pirate Party, founded by a group of internet activists, did not perform as well as polls had indicated. While its share of the vote tripled from the last election in 2013, it came in only third with 15 percent.
The Left-Green Movement emerged as the second-biggest party while the former government Progressive Party lost more than half of its votes. Its party leader resigned as prime minister on Sunday, a formality as the government did not get a majority.
(Reporting by Stockholm newsroom; Editing by Alistair Scrutton)