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ICELANDIC VOTERS REJECT AUSTERITY

Associated Press

REYKJAVIK, Iceland - In a dramatic about-face, Icelandic voters have returned to power the center-right parties that led the national economy to collapse five years ago.

With all votes counted Sunday, the conservative Independence Party and rural-based Progressive Party - who governed Iceland for decades before the 2008 crash - each had 19 seats in Iceland's 63-seat parliament, the Althingi.

The parties, which are promising to ease Icelanders' economic pain with tax cuts and debt relief, took 51 percent of the vote between them, and are likely to form a coalition government.

Voters shunned the Social Democrat-led coalition that has spent four years trying to turn the country around with painful austerity measures. The Social Democrats took nine seats and their former coalition partners the Left-Greens seven.

The shift to the right following Saturday's parliamentary election will almost certainly shelve Iceland's plans to join the European Union. The Progressives and Independents oppose the idea.

The two parties governed Iceland for several decades, often in coalition, overseeing economic liberalization that spurred a banking and business boom - until the economy crashed spectacularly during the 2008 credit crisis.

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