Iceland leader cuts short US trip over 'Panama Papers' uproar

2016-04-05 14:28
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PICS: Panama Papers leak leads to mass protests in Iceland

Thousands of Icelanders took to the streets to call for their prime minister's resignation after leaked tax documents dubbed the "Panama Papers" prompted allegations that he and his wife used an offshore firm to hide million-dollar investments.

Reykjavik - Iceland's president cut short a visit to the United States to return home on Tuesday following calls for the premier to step down over his alleged million-dollar offshore holdings, public broadcaster RUV reported.

President Olafur Ragnar Grimsson landed early on Tuesday in Reykjavik, where thousands of demonstrators had hours earlier called for Prime Minister Sigmundur David Gunnlaugsson's resignation, throwing eggs and yoghurt at the parliament building.

Another protest was scheduled for Tuesday at 17:00.

The presidency in Iceland is largely a ceremonial position, but Grimsson was to meet during the day with representatives of the political parties in the Althing, or parliament, where a motion of no-confidence presented by the leftwing opposition could be voted on as early as this week.

Finance Minister Bjarni Benediktsson, who like Gunnlaugsson was named in the leak of millions of financial records known as the "Panama Papers", has also cut short a visit to Florida to return home to meet with Gunnlaugsson and address the matter.

Benediktsson is the head of the rightwing Independence Party, a junior coalition member.

Financial records published by the International Consortium of Investigative Journalists showed that Gunnlaugsson, aged 41, and his wife Anna Sigurlaug Palsdottir bought the offshore company Wintris Inc. in the British Virgin Islands in December 2007.

He sold his 50% share to his wife for a symbolic sum of $1 at the end of 2009.

But when he was elected to parliament for the first time in April 2009, as a member of the centre-right Progressive Party, he neglected to mention his stake in his declaration of shareholdings.

On Tuesday, several members of Gunnlaugsson's own party called for the first time for his resignation on a member's Facebook page.

City councillors from Gunnlaugsson's own constituency of Akureyri urged him to step down over the "crisis of confidence".

But the PM, who still enjoys the support of most of his party since the scandal broke, has refused to resign.

"I have not considered quitting because of this matter, nor am I going to quit," he told Channel 2 television on Monday.

Gunnlaugsson insists he has no money offshore and that he and his wife paid all their taxes in Iceland.

The issue is particularly sensitive given the country's 2008 financial meltdown when the three main banks collapsed after borrowing beyond their means to fund ambitious investments abroad.

That crisis brought down the rightwing government, plunging the country into a deep recession and requiring a bailout from the International Monetary Fund.

The opposition is expected to vote for the motion of no-confidence, and Gunnlaugsson's party against it.

As junior coalition member, the Independence Party would then hold the balance of power, and currently appears divided on the issue given Benediktsson's own implication in offshore dealings.

Read more on:    iceland  |  panama papers

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