Iceland’s Prime Minister Sigmundur David Gunnlaugsson stepped down from office April 5, 2016, amid a scandal revealed by the Panama Papers. In the documents, Gunnlaugsson and his wife were involved with Mossack Fonseca, a Panamanian law firm who advised clients to funnel large sums of money through shell companies. Gunnlaugsson and his wife created one of these companies and transferred millions of dollars into accounts in Seychelles. When news of his involved broke in Iceland, massive demonstrations took place, and the Prime Minister relinquished his position.
The Panama Papers were given to the German newspaper, Suddeustche Zeitung, by an anonymous source. The Papers are a series of over 11 million documents detailing the financial advice of the law firm Mossack Fonseca and the actions taking by their clients. The newspaper forwarded the documents to the International Consortium of Investigative Journalists (ICIJ), who have been sorting through the papers. The ICIJ has listed 12 world leaders and 128 politicians involved in shady monetary practices. The ICIJ has announced that next month, May 2016, they will release all of the documents.
One of the world leaders named in the Panama Papers was Iceland’s Prime Minister. The 41-year-old head-of-state would be leaving for an undisclosed amount of time. In the interim, the Agriculture Minister Sigurdur Ingi Johannsson, vice chairman of Iceland’s Progress Party will lead a new coalition government.
He is not the only person from Iceland to be involved in this scandal. The Wall Street Journal reported Finance Minister Bjarni Benediktsson and Interior Minister Olof Nordal were named in the documents as well.
During the time that Gunnlaugsson and his wife were involved with offshore companies, Iceland was going through a harsh time financially. The island nation was hit hard during the 2008 economic crisis. The Wall Street Journal indicates the country’s inflation rate rose to 18 percent, economic growth stagnated and jobs dried up.
The money involved in the scandal came from Gunnlaugsson’s wife. Her family business made off-road vehicles. She sold her share and received a large sum of money. Upon the recommendation of their bank, the couple transferred the money to holding company based out of the British Virgin Islands.
Sunna Aevarsdottir, a volunteer of Iceland’s Pirate Party said, “He hid his interest in the foreign banks while masquerading as a great crusader against the banks.”
In an interview give to The Wall Street Journal, a 49-year-old man from Reykjavik, Sigmundur Halldorsson said, the Prime Minister urged the people in Iceland to believe in their country, meanwhile, he knew it wasn’t a good place for his money.
There was public outrage when the people of Iceland found of Sigmundur David Gunnlaugsson was involved, and called for him to step down amid the scandal. In a nation of 330,000 people, somewhere between 10,000 and 20,000 protesters took to the streets. On Monday, April 4, the protesters gathered outside the parliament building banging drums.
Eva Joly, a member of the European Parliament who investigated Iceland’s banking crisis, said, “The idea that the prime minister, the finance minister and the interior minister didn’t play by the rules in unbearable.”
She continued about Gunnlaugsson, “There is a negative preconception because he would need very good reasons to explain why he couldn’t set up a company elsewhere that in a tax haven.”
Gunnlaugsson became the voice of opposition to banks during the crisis. Part of his stance helped lead him to victory in the 2013 election. Since that time his popularity has faded. A survey done by Frettabladid, an Icelandic newspaper, showed only 12.8 percent support of Gunnlaugsson’s Progress Party.
Iceland’s Prime Minister Sigmundur David Gunnlaugsson has stepped down amid allegations of his involvement in an offshore company scandal. He has stepped aside for an undisclosed amount of time and Sigurdur Ingi Johannsson take over. Gunnlaugsson is the first political casualty as a result of the Panama Papers.
By Harrison Baker
Edited by Cathy Milne
International Business Times: Who Is Sigmundur David Gunnlaugsson? Iceland’s Prime Minister Resigns Over Panama Papers Scandal
The Reykjavik Grapevine: PM Sigmundur Davíd Gunnlaugsson Wavers On Resignation
The Sydney Morning Herald: Panama Papers: Iceland PM Sigmundur Gunnlaugsson resigns
The Wall Street Journal: Iceland’s Prime Minister Sigmundur David Gunnlaugsson Steps Aside After Release of ‘Panama Papers’
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