Iceland prime minister resigns as Panama Papers investigations spread

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The Panama Papers have brought down Iceland’s prime minister.

Sigmundur David Gunnlaugsson resigned on March 5 following tax evasion allegations that were revealed in the leaked Panama files.

Iceland's Prime Minister Sigmundur David Gunnlaugsson, speaks during a parliamentary session in Reykjavik on April 4. /AP
Iceland’s Prime Minister Sigmundur David Gunnlaugsson speaks during a parliamentary session in Reykjavik on April 4. /AP

Gunnlaugsson stepped down with a year left on his term amid mounting pressure from the opposition and from some in his own party.

“What this exemplifies more than anything else is that there’s a growing lack of tolerance over the way that the international financial system has been gamed and rigged by corrupt elites,” Carl Dolan, director of Transparency International’s EU division, said.

Unlike leaders in other countries, such as Russia, Pakistan and Argentina, Gunnlaugsson was unable to stave off the revelations and ensuing outrage after the Panama Papers were made public.

The Panama files revealed that the 41-year-old premier and his wife had investments in the British Virgin Islands which included debt in Iceland’s three failed banks.

Dolan said that if the situation in Iceland is replicated, whereby a politician “has a secret stake in a company that has benefited from the decisions of his government,” then he would expect “more heads to roll.”

In recent years, “we’ve had prime ministers in Slovenia and the Czech Republic who have resigned over these kinds of issues,” Dolan said. “The only difference with the Panama Papers is the source of the information – it came from a massive data leak.”

UK Prime Minister David Cameron said he has no offshore funds or trusts amid demands for an inquiry from opposition leader Jeremy Corbyn.

Gunnlaugsson named his agriculture minister, Sigurour Ingi Johannsson, as his proposed replacement. The outgoing prime minister will remain chairman of the Progressive Party, which has governed in a two-party coalition since 2013.