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01/10/2016

Panama leaks put the heat on Iceland’s government

Global Europe

Panama leaks put the heat on Iceland’s government

People demonstrate against Iceland's Prime Minister Sigmundur Gunnlaugsson in Reykjavik on 4 April [Reuters].

Iceland’s opposition filed a motion of no confidence in the prime minister and protesters gathered outside parliament yesterday (4 April) after the Panama Papers showed his wife owned an offshore company with big claims on the country’s collapsed banks.

The hidden wealth of some of the world’s most prominent leaders, politicians and celebrities has been revealed by an unprecedented leak of millions of documents which show the myriad ways in which the rich can exploit secretive offshore tax regimes.

Record-breaking leak exposes offshore holdings of politicians and elites

The hidden wealth of some of the world’s most prominent leaders, politicians and celebrities has been revealed by an unprecedented leak of millions of documents which show the myriad ways in which the rich can exploit secretive offshore tax regimes.

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The allegations in the leaks released globally over the weekend first surfaced in Iceland last month. But the renewed spotlight has racked up pressure on Prime Minister Sigmundur David Gunnlaugsson.

“I certainly won’t (resign) because what we’ve seen is the fact that, well, my wife has always paid her taxes. We’ve also seen that she has avoided any conflict of interest by investing in Icelandic companies at the same time that I’m in politics,” he told Reuters.

“And finally, we’ve seen that I’ve been willing to put the interests of the people of Iceland first even when it’s at a disadvantage to my own family.”

Opponents allege a conflict of interest and say he should have been open about the overseas assets and the company.

Gunnlaugsson’s center-right government coalition, in power since 2013, is involved in striking deals with claimants on the bankrupt banks.

A spokesman in the prime minister’s office has said the claims of the firm owned by the prime minister’s wife totaled more than 500 million Icelandic crowns ($4.1 million).

Crowds outside parliament demanded his and his government’s resignation, beating drums and sounding horns. Organizers said more than 10,000 had gathered.

“What would be the most natural and the right thing to do is that (he) resign as prime minister,” Birgitta Jonsdottir, the head of the Pirate Party, one of Iceland’s biggest opposition parties, told Reuters.

“There is a great and strong demand for that in society and he has totally lost all his trust and believability.”

The coalition holds 38 of 63 seats in parliament. It is unclear how the scandal might impact his coalition majority in a vote of no-confidence against him and his government that could take place later this week.

“We’ve seen unprecedented improvements in the Icelandic economy and the living standards of people in Iceland in recent years since this government took office, so we’d certainly like to continue with that work,” Gunnlaugsson added.

Many Icelanders blame politicians for failing to control bankers and for years of austerity after Iceland’s big banks failed in 2008, sending the economy into a nosedive.

When Iceland was nearly bankrupt, the country asked to join the EU. When the economic context improved, the country dropped the EU bid.

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An online petition for the prime minister’s resignation had roughly 27,000 signatures late on Monday. Iceland has a population of around 330,000.

“It is only logical new elections take place,” Arni Pall Arnason, head of the opposition Social Democratic Alliance, told Reuters on Friday.