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| Icelandic PM faces no confidence vote over Panama Papers disclosures | Icelandic PM faces no confidence vote over Panama Papers disclosures |
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| Iceland’s prime minister is under fierce pressure to step down after leaked documents showed his wife owned a secretive offshore company with a potentially multimillion-pound claim on the country’s collapsed banks – representing what opponents said was a major conflict of interest. | Iceland’s prime minister is under fierce pressure to step down after leaked documents showed his wife owned a secretive offshore company with a potentially multimillion-pound claim on the country’s collapsed banks – representing what opponents said was a major conflict of interest. |
| As opposition parties called a vote of no confidence for later this week and an online petition demanding Sigmundur Davíð Gunnlaugsson’s resignation garnered – in a country of 330,000 people – more than 23,000 signatures, thousands of protesters gathered outside parliament in central Reykjavik for an evening protest, chanting, banging drums, blowing whistles and waving bananas – symbolising the belief of many that they were living in a banana republic. | As opposition parties called a vote of no confidence for later this week and an online petition demanding Sigmundur Davíð Gunnlaugsson’s resignation garnered – in a country of 330,000 people – more than 23,000 signatures, thousands of protesters gathered outside parliament in central Reykjavik for an evening protest, chanting, banging drums, blowing whistles and waving bananas – symbolising the belief of many that they were living in a banana republic. |
| “He’s just lost all credibility,” said Arntho Haldersson, a financial services consultant. “Our prime minister, hiding assets in offshore accounts … After all this country has been through, how can he possibly pretend to lead Iceland’s resurrection from the financial crisis? He should go.” | “He’s just lost all credibility,” said Arntho Haldersson, a financial services consultant. “Our prime minister, hiding assets in offshore accounts … After all this country has been through, how can he possibly pretend to lead Iceland’s resurrection from the financial crisis? He should go.” |
| “He’s lied,” said Anna Mjöll Guðmundsdóttir, a tourism researcher. “These people, they say they’ve learned the lessons from what happened to us in 2008, but they’re still just hiding our money.” Tinna Laufey Ásgeirsdóttir, a university professor, agreed: “He’s not been forthright. If people had been informed of this they might have voted differently. The size of this demonstration shows how disappointed people are.” | “He’s lied,” said Anna Mjöll Guðmundsdóttir, a tourism researcher. “These people, they say they’ve learned the lessons from what happened to us in 2008, but they’re still just hiding our money.” Tinna Laufey Ásgeirsdóttir, a university professor, agreed: “He’s not been forthright. If people had been informed of this they might have voted differently. The size of this demonstration shows how disappointed people are.” |
| The Panama Papers, released on Sunday, revealed that Gunnlaugsson and his wife, Anna Sigurlaug Pálsdóttir, bought a British Virgin Islands-based company, Wintris Inc, from Mossack Fonseca, the Panamanian law firm at the centre of the leak, in 2007 to invest money from the sale of Palsdottir’s share of her family’s business. | The Panama Papers, released on Sunday, revealed that Gunnlaugsson and his wife, Anna Sigurlaug Pálsdóttir, bought a British Virgin Islands-based company, Wintris Inc, from Mossack Fonseca, the Panamanian law firm at the centre of the leak, in 2007 to invest money from the sale of Palsdottir’s share of her family’s business. |
| Gunnlaugsson sold his 50% of the company to Pálsdóttir for $1 at the end of 2009, soon after he was elected as an MP for the first time and a year after the financial crisis that plunged Iceland into a devastating depression. He has never declared an interest in the company. | Gunnlaugsson sold his 50% of the company to Pálsdóttir for $1 at the end of 2009, soon after he was elected as an MP for the first time and a year after the financial crisis that plunged Iceland into a devastating depression. He has never declared an interest in the company. |
| The prime minister’s office now says his shareholding was an error and “it had always been clear to both of them that the prime minister’s wife owned the assets”. Once drawn to the couple’s attention in late 2009, the error was corrected. | The prime minister’s office now says his shareholding was an error and “it had always been clear to both of them that the prime minister’s wife owned the assets”. Once drawn to the couple’s attention in late 2009, the error was corrected. |
| Since he became prime minister in 2013, Gunnlaugsson has overseen sensitive negotiations with the creditors of the three big Icelandic banks that collapsed during the 2008 crisis – while knowing, the leaked documents show, that his wife’s offshore company, Wintris Inc, which lost 515m kronur (£2.8 million) in the crash, was owed a sizeable sum from their bankruptcies. | Since he became prime minister in 2013, Gunnlaugsson has overseen sensitive negotiations with the creditors of the three big Icelandic banks that collapsed during the 2008 crisis – while knowing, the leaked documents show, that his wife’s offshore company, Wintris Inc, which lost 515m kronur (£2.8 million) in the crash, was owed a sizeable sum from their bankruptcies. |
| The Guardian has seen no evidence to suggest tax avoidance, evasion or any dishonest financial gain on the part of Gunnlaugsson, Pálsdóttir or Wintris. | The Guardian has seen no evidence to suggest tax avoidance, evasion or any dishonest financial gain on the part of Gunnlaugsson, Pálsdóttir or Wintris. |
| On Monday Gunnlaugsson, 41, who was elected on a pledge to fight demands from the banks’ foreign customers – including British depositors – for full repayment, insisted he had broken no laws and had no intention of resigning. | On Monday Gunnlaugsson, 41, who was elected on a pledge to fight demands from the banks’ foreign customers – including British depositors – for full repayment, insisted he had broken no laws and had no intention of resigning. |
| “I have not considered quitting because of this matter nor am I going to quit because of this matter,” he told parliament. “The government has had good results. Progress has been strong and it is important that the government can finish its work.” | “I have not considered quitting because of this matter nor am I going to quit because of this matter,” he told parliament. “The government has had good results. Progress has been strong and it is important that the government can finish its work.” |
| He has said the assets were not “hidden in a tax haven” but were fully declared and taxed in Iceland, and he insisted he and his two-party centre-right coalition government had always put the interest of the public before his own in dealing with the financial claims– at the cost, he said, of his wife’s financial interests. | He has said the assets were not “hidden in a tax haven” but were fully declared and taxed in Iceland, and he insisted he and his two-party centre-right coalition government had always put the interest of the public before his own in dealing with the financial claims– at the cost, he said, of his wife’s financial interests. |
| But there were strong signs that Gunnlaugsson had lost the support of his coalition partners in government. | |
| Flying back from a holiday in Florida, finance minister Bjarni Benediktsson, who leads the Independence party, declined to give his backing to the prime minister and said the Panama Papers revelations were “a heavy blow” for the government. | |
| Asked if about Gunnlaugsson’s future, he told Morgunblaðið newspaper that he would not comment on this matter before he had had a chance to do discuss it with his party. | |
| Earlier, Gunnlaugsson had fought against a barrage of angry accusations from opposition MPs at question time. Throughout the session, large crowds of protestors could be heard outside the assembly building in the centre of Reykjavik. | |
| Some estimates have suggested as many as 30,000, or 10% of the Icelandic population, had gathered to voice their protest. Gunnlaugsson left shortly afterwards. | |
| Iceland’s president has said parliament will be suspended on Tuesday in the light of protests. This is expected to give Gunnlaugsson’s Progressive party time to sit down with Benediktsson to see if the government can be saved. One leading opposition figures said: “We think it is increasingly likely that the Independence party will pressure Sigmundur David to resign to save their own skin, avoid elections, and hope that things calm down.” | |
| Gunnlaugsson’s political opponents, local media and many ordinary Icelanders still struggling to recover from the crisis – which halved the value of the country’s currency and led to a bailout from the International Monetary Fund – feel he should have been open about his family’s overseas assets and the existence of Wintris. | |
| “What would be the most natural and the right thing to do is that he resign as prime minister,” said Birgitta Jónsdóttir, of the opposition Pirate party. “There is great demand for that in society; he has totally lost all his trust and believability.” | “What would be the most natural and the right thing to do is that he resign as prime minister,” said Birgitta Jónsdóttir, of the opposition Pirate party. “There is great demand for that in society; he has totally lost all his trust and believability.” |
| The former Social Democrat prime minister Jóhanna Sigurðardóttir said Gunnlaugsson should go because he had “displayed his lack of faith in the Icelandic currency and economy”. | The former Social Democrat prime minister Jóhanna Sigurðardóttir said Gunnlaugsson should go because he had “displayed his lack of faith in the Icelandic currency and economy”. |
| Related: Panama Papers: mass protests in Iceland call for prime minister to quit – live | Related: Panama Papers: mass protests in Iceland call for prime minister to quit – live |
| The coalition between Gunnlaugsson’s Progressive party and the Independence party of the finance minister, Bjarni Benediktsson – whose name also appears in the Panama Papers in connection with a Seychelles-based company of which he once owned a third – holds 38 of the 63 seats in parliament, meaning any no confidence motion has little chance of success. | |
| But rising public indignation could harm the prime minister’s future chances in a country still profoundly shocked by the way a small group of bankers and businessmen used shell companies in offshore tax havens to conceal their dealings in high-risk financial products, creating a financial bubble which, when it burst, brought the country to its knees. | But rising public indignation could harm the prime minister’s future chances in a country still profoundly shocked by the way a small group of bankers and businessmen used shell companies in offshore tax havens to conceal their dealings in high-risk financial products, creating a financial bubble which, when it burst, brought the country to its knees. |
| Thor Tomasarson, a software engineer, said at the protest: “It just looks like he doesn’t have the interests of ordinary Icelanders at heart. He doesn’t care. He doesn’t see it matters that he hasn’t come clean. People have suffered, and we don’t want someone like that representing our country.” | Thor Tomasarson, a software engineer, said at the protest: “It just looks like he doesn’t have the interests of ordinary Icelanders at heart. He doesn’t care. He doesn’t see it matters that he hasn’t come clean. People have suffered, and we don’t want someone like that representing our country.” |
| Wintris’s investments – bonds in Landsbanki, Glitnir and Kaupthing, banks that failed within days of each other in 2008 with liabilities of more than 10 times Iceland’s GDP – have reportedly shrunk to 15-30% of their original value, but are allegedly still worth several million pounds. | Wintris’s investments – bonds in Landsbanki, Glitnir and Kaupthing, banks that failed within days of each other in 2008 with liabilities of more than 10 times Iceland’s GDP – have reportedly shrunk to 15-30% of their original value, but are allegedly still worth several million pounds. |
| Benediktsson told the Guardian the company of which he had owned a third had been set up with two co-investors to buy a property in Dubai, but the deal had fallen through in 2009 and he had had no dealings with the company since. |