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Icelandic government stages reshuffle and rejects calls to resign Icelandic government appoints new PM and rejects calls to resign
(about 2 hours later)
Iceland’s coalition government has rejected calls from protesters and opposition leaders to stand down, saying a day after popular fury at the offshore holdings of the family of the prime minister, Sigmundur Davíð Gunnlaugsson, forced his departure that it has reshuffled and will carry on. Iceland’s crisis-hit coalition government has appointed a new prime minister and pledged to hold parliamentary elections before the end of this year.
The agriculture and fisheries minister, Sigurður Ingi Jóhannsson, was named as successor to Gunnlaugsson, the first major casualty of the Panama Papers leaks, with parliamentary elections due in early 2017 to be brought forward to this autumn, a government spokesman told reporters. A day after Sigmundur Davíð Gunnlaugsson – the first major casualty of the Panama Papers – stepped aside amid popular outrage at revelations of his family’s offshore holdings, the ruling Progressive and Independence parties named the agriculture and fisheries minister, Sigurður Ingi Jóhannsson, as his successor.
Birgitta Jónsdóttir, leader of the opposition Pirate party whose support has soared in the crisis, said the centre-right government – having rejected demands to stand down immediately and call snap elections – had agreed to bring forward polls due in spring 2017 to this autumn.
Related: Iceland PM steps aside after protests over Panama Papers revelationsRelated: Iceland PM steps aside after protests over Panama Papers revelations
The move could allow the hard-pressed centre-right administration to avoid a snap election it would almost certainly lose, sidestepping demands from an enraged opposition and many protesting Icelanders – who demonstrated outside parliament for a third straight day – for it to stand down. It was unclear whether the move would satisfy angry Icelanders, who staged a mass demonstration outside parliament for a third straight day. “We want new elections,” said Atli Magnusson, a behavioural analyst, standing in a chilly drizzle with 3,000 other protesters. “They don’t have our trust any more.”
“We want new elections,” said Atli Magnusson, a behavioural analyst, standing in a chilly drizzle with 3,000 other protesters – some lobbing yoghurt, eggs and bananas at the walls and windows of the national assembly. “They don’t have our trust any more. What they have done now is not what people are asking for.” As protestors lobbed yoghurt, eggs and bananas at the walls and windows of the national assembly, Sigurbog Osk Haraldsdottir, a landscape architect, said: “We have to be able to have our say on what has happened. It has done great damage. We want these people to go – and go for good.”
Sigurbog Osk Haraldsdottir, a landscape architect, said: “It’s just the same. We’re getting the same old thing, with a few small changes. This won’t alter anything; we have to vote on what’s happened, and we want these people to go, for good.” Gunnlaugsson stepped aside as prime minister on Tuesday for “an unspecified amount of time” after leaked documents revealed his wife owned a British Virgin Islands-based company with multimillion-pound claims on Iceland’s failed banks, sparking popular outcry.
Gunnlaugsson stepped aside as prime minister for “an unspecified amount of time” on Tuesday after leaked documents revealed his wife owned a British Virgin Islands-based company with multimillion-pound claims on Iceland’s failed banks. He has repeatedly denied any wrongdoing. “We expect to have elections this autumn,” Johanssonn told reporters, insisting the coalition had the necessary support to keep running the country despite the protests. “We will continue our work together. We are of course hoping this will help bring stability in the political system,” he said.
After a day of talks between his Progressive party and its coalition partner, the Independence party headed by the finance minister, Bjarni Benediktsson, the government’s decision infuriated opposition parties who have tabled a motion of no confidence in the government on which they are determined parliament should vote this week. He said the government’s decision to hold elections in autumn would give it time to complete one of the biggest economic policy changes in decades - the ending of capital controls introduced to rescue the economy from the 2008 financial crisis.
“The only way to repair the complete breach of trust between the nation and this government is for it to resign and for fresh elections to be held,” said Birgitta Jónsdóttir of the radical Pirate party, which according to poll released on Wednesday would stand to win any new election. Jóhannsson is expected to meet Iceland’s president, Ólafur Ragnar Grímsson, on Thursday to seek his approval to become the country’s next prime minister. The Independence party leader and finance minister, Bjarni Benediktsson, said the government had “responded to the events of the past few days”.
Arni Pall Arnason of the Social Democratic Alliance accused the coalition of “trying to cling on to power while making the absolute minimum of changes in order to escape the public. The government doesn’t want to confront this issue – or to face the public.” He warned that a planned no-confidence motion tabled by opposition parties and likely to be voted on before the end of the week would be comfortably defeated by the coalition, which holds an absolute majority with 38 of parliament’s 63 seats.
Jónsdóttir said Gunnlaugsson was a prime minister “on leave”, adding that polls had given Jóhannsson, who is favourite to take over the position, an approval rating of only 3% as recently as last month. Opposition leaders had earlier accused the government of trying to dodge voters’ anger. Árni Páll Árnason of the Social Democratic Alliance said the coalition was “trying to cling on to power while making the absolute minimum of changes, in order to evade the public”.
“They cannot just put a sticking plaster over this,” she told the Guardian. “This is a broken bone.” But observers predicted the government, which has an absolute majority in parliament, would ride out the storm. Jónsdóttir said the only way to repair what she called a “complete breach of trust between the nation and this government” was for fresh elections to be held. “They cannot just put a sticking plaster over this,” she told the Guardian. “This is a broken bone.”
“Unless something very unexpected happens, it seems likely to me that this government has survived, and will continue and hope this dies down,” said Stefania Oskarsdottir, an associate political science professor at Iceland University. She said Gunnlaugsson was a prime minister “on leave”, adding that polls had given Jóhannsson, who is favourite to take over the position, an approval rating of only 3% as recently as last month.
Any new election would be likely to result in a victory for Jónsdóttir’s Pirate party, according to the latest polling. Observers predicted the government would ride out the storm, at least in the short term. “Unless something very unexpected happens, it seems likely to me that this government has survived, and will continue and hope this dies down,” said Stefania Oskarsdottir, an associate political science professor at Iceland University.
Campaigning for grassroots democracy, more political transparency and internet freedoms, it has the support of a record 43% of the electorate, the Gallup poll conducted on Monday and Tuesday showed – significantly more than the combined score of the governing Progressive and Independence parties, which stood at 11.2% and 21.6% respectively. But an election held now would be likely to hand victory to Jónsdóttir’s Pirate party. Campaigning for grassroots democracy, more political transparency and internet freedoms, it has the support of a record 43% of the electorate, a Gallup poll conducted on Monday and Tuesday showed – significantly more than the combined score of the governing Progressive and Independence parties, which stood at 11.2% and 21.6% respectively.
Related: Iceland’s PM faces calls for snap election after offshore revelationsRelated: Iceland’s PM faces calls for snap election after offshore revelations
Revelations this week that Gunnlaugsson’s wife invested her share of the proceeds from the sale of her family’s business in an offshore company that held millions of pounds of bonds in the three major Icelandic banks that collapsed in the financial crisis of 2008 have sparked public fury and mass protests.Revelations this week that Gunnlaugsson’s wife invested her share of the proceeds from the sale of her family’s business in an offshore company that held millions of pounds of bonds in the three major Icelandic banks that collapsed in the financial crisis of 2008 have sparked public fury and mass protests.
Gunnlaugsson is also accused of a conflict of interest because his government has been involved in negotiating deals with the collapsed banks’ international creditors, of which his wife’s company is one.Gunnlaugsson is also accused of a conflict of interest because his government has been involved in negotiating deals with the collapsed banks’ international creditors, of which his wife’s company is one.
He sold his 50% stake in the company to his wife for $1 at the end of 2009, but did not declare an interest in the company when he was elected an MP earlier that year nor when he became prime minister in 2013.He sold his 50% stake in the company to his wife for $1 at the end of 2009, but did not declare an interest in the company when he was elected an MP earlier that year nor when he became prime minister in 2013.
His office said the couple had answered all questions about the assets, which they had “never sought to hide”. All relevant taxes had been paid in Iceland since 2008, it said, and no parliamentary disclosure rules had been broken.His office said the couple had answered all questions about the assets, which they had “never sought to hide”. All relevant taxes had been paid in Iceland since 2008, it said, and no parliamentary disclosure rules had been broken.
The Guardian has seen no evidence to suggest tax avoidance, evasion or any dishonest financial gain on the part of Gunnlaugsson, his wife or Wintris.The Guardian has seen no evidence to suggest tax avoidance, evasion or any dishonest financial gain on the part of Gunnlaugsson, his wife or Wintris.
Two other cabinet ministers named in the Panama Papers, Benediktsson and the interior minister, Olof Nordal, could be replaced.