Iceland president rejects PM’s attempt to call a new vote
Iceland prime minister resigns amid fallout from ‘Panama Papers’ disclosures
(about 2 hours later)
REYKJAVIK, Iceland — Iceland’s president on Tuesday refused a request from the prime minister to dissolve parliament and call a new election amid a dispute over the premier’s offshore tax affairs.
Iceland’s prime minister tendered his resignation Tuesday amid street protests and political outrage after leaked files from a Panama law firm showed his wife owned an offshore company with links to some of the country’s collapsed banks.
Embattled Prime Minister Sigmunder David Gunlaugsson is facing growing calls for him to step down because of reported offshore financial dealings by him and his wife that opposition lawmakers say show a significant conflict of interest with his job.
Prime Minister Sigmundur Gunnlaugsson asked the country’s president to dissolve parliament, which would likely lead to new elections in the most dramatic fallout to date from the disclosures known as the Panama Papers.
Thousands of Icelanders protested outside parliament on Monday, demanding that Gunlaugsson resign, and a similar protest is planned for Tuesday evening. The prime minister will meet with parliament in a session Wednesday expected to be dominated by the topic.
The move to step down avoids a showdown in parliament over Gunnlaugsson’s government. Opposition lawmakers had sought a confidence vote as thousands of protesters gathered in Iceland’s capital, Reykjavik, demanding Gunnlaugsson’s resignation. The crowds at times hurling eggs and fruit.
President Olafur Ragnar Grimsson, however, said he wants to consult with other party leaders first before agreeing to end the coalition government between Gunlaugsson’s center-right Progressive Party and the Independence Party.
The prime minister has previously refused to step down, claiming his wife’s overseas assets were taxed in Iceland and insisted there was no fiscal wrongdoing.
“I need to determine if there is support for dissolving (parliament) within the ruling coalition and others. The prime minister could not confirm this for me, and therefore I am not prepared at this time to dissolve parliament,” Grimsson said.
But critics say the findings of the Panama Papers report point to questions about conflicts of interest and other possible improprieties eight years after the island nation’s banking system collapsed amid the global financial crisis.
He said he plans to meet with the government’s coalition partner “in a few hours” to discuss the crisis caused by the massive leak of documents from a Panamanian law firm that documents widespread abuse of the tax haven system.
A government spokesman said the company owned by Gunnlaugsson’s wife had claims of more than $4.1 million against some of Iceland’s collapsed banks.
The impact in Iceland has been most dramatic, but officials in Russia, Ukraine, China and other countries also face questions about possibly dubious offshore schemes. The document leak is sparking calls for transparency and reform as the scope of tax avoidance is revealed.
The Panama Papers — the result of a year-long collaboration between a German newspaper, Süddeutsche Zeitung the International Consortium of Investigative Journalists and more than 100 media outlets — claim to expose “a cast of characters who use offshore companies to facilitate bribery, arms deals, tax evasion and drug trafficking.”
The leaked financial documents allege that the prime minister and his wife set up a company called Wintris in the British Virgin Islands with the help of the Panamanian law firm. Gunlaugsson is accused of a conflict of interest for failing to disclose his involvement in the company, which held interests in failed Icelandic banks that his government was responsible for overseeing.
The report does not make specific allegations of wrongdoing, but raises questions about the need for hard-to-trace offshore accounts. Prominent figures in China, Russia and other countries have been named in the report.
Arni Pall Arnason, leader of the opposition Social Democratic Alliance, said Gunlaugsson’s position is not tenable.
Read more:
“I think it’s obvious that we cannot tolerate a leadership that is linked to offshore holdings,” he said. “Iceland cannot be the only western European democratic country with a political leadership in that position.”
Today's coverage from Post correspondents around the world
Gunlaugsson has denied any wrongdoing. He said he and his wife have paid all taxes and done nothing illegal.
He also said his financial holdings didn’t affect his negotiations with Iceland’s creditors.
Iceland, a volcanic North Atlantic island nation with a population of 330,000, was rocked by a prolonged financial crisis when its main commercial banks collapsed within a week of one another in 2008.
Wide protests helped bring down the government then, and opposition leaders believe similar tactics will topple the prime minister and lead to new elections.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
