This past week hase been extremely eventful in Iceland. So, what do you need to know to make sense of things? We at Iceland Insider compiled this handy guide the events to help you get up to speed on local politics and what is likely to happen next.
The Panama Papers claim their first victim
On Tuesday Sigmundur Davíð Gunnlaugsson became the first Prime Minister in the history of Iceland to resign from office. Foreign media have paid close attention to the developments in Iceland, as Sigmundur was the first victim of the fallout from the leaking of the Panama Papers which outline the dealings of Panamanian law firm Mossack Fonseca.
Read more: Breaking: Embattled Prime Minister Sigmundur Davíð resigns
A slow-motion car crash
Sigmundur Davíð had come under growing fire from politicians from across the political spectrum, including members of his own party, after the airing of an interview with the Swedish TV station SVT where he was confronted over his connections to an off-shore company in the notorious tax-haven Tortola. Sigmundur was skewered on HBO by UK born comedian John Oliver, who described the interview as a “slow-motion car crash”.
Read more: John Oliver on TV interview with Iceland's former PM: like watching a slow motion car crash”
In what has now become his signature political style, Sigmundur, who has on numerous occasions complained his words and actions are misunderstood or misconstrued by the media, managed to handle his resignation in a way which created even greater confusion and frustration.
Read more: The farce continues: Now the PM implies the president lied
Read more: And the plot thickens: the Prime Minister claims he did NOT resign
Not the first to resign over the Panama Papers
Although the PM was widely reported as the first victim of the Panama Papers, he was actually the second Icelandic politician to resign over revelations in the document leak. Several hours before Sigmundur Davíð announced he would resign on Tuesday one of the highest ranking members of the conservative Independence party in Reykjavík, City Councilman Júlíus Vífill Ingvarsson resigned his seat on the City Council.
Read more: Councilman resigns, another pledges to cooperate with ethics probe as Panama Papers shake City Hall
Mass protests
The resignation came after as many as 22,000 people protested in front of the house of parliament (Iceland's total population is 330,000), on Monday, demanding his resignation. Despite the resignation of the PM, the protests have continued, as people demand the other two government ministers whose names appeared in the Panama Papers resign as well. The Minister of Finance and chairman of the conservative Independence Party, Bjarni Benediktsson, and the Minister of the Interior, Ólöf Nordal, also of the Independence Party, have both refused to resign. Protesters have also demanded parliament be dissolved and new elections be called.
The protests which are the largest since the mass protests which followed the banking crash of 2008, the so called “pots-and-pans revolution” of the winter of 2008-9, have become an inspiration for protesters in England, who have demanded UK Prime Minister David Cameron follow the example set by Sigmundur Davíð, and resign over revelations he had a shell company registered in an off-shore tax haven. Eiríkur Bergmann, a professor at the University of Iceland, told the local TV station Stöð 2, that the protests in Iceland had severely weakened Cameron.
Despite the continuing protests and significant pressure from members of the coalition parties, the conservative Independence Party and centre-right Progressive Party, political observers in Iceland believe it is unlikely there will be further resignations from the government or that elections will be held immediately, as the protesters demand. On Thursday the government weathered a vote of no-confidence submitted by the minority parties in parliament.
A new cabinet formed under a cloud of distrust, dwindling support
Sigmundur Davíð Gunnlaugsson tendered his resignation to the President of Iceland on Wednesday. A new cabinet, under the leadership of the vice-chairman of the Progressive Party, former Minister of Fisheries and Agriculture, Sigurður Ingi Jóhannsson, was announced. The cabinet, which met for the first time on Monday morning, enjoys the trust of just 26% of the voters, according to a new poll.
According to a poll, conducted by the polling firm Maskina an overwhelming majority of voters, 66%, say they have little or very little trust in the government. The new prime minister enjoys the trust of less than 20% voters, according to the poll. The decision by the former PM to step down has also failed to satisfy voters, as 80% also want to see him resign his seat in parliament. Sigmundur Davíð has neither resigned his seat in parliament nor his post as the chairman of the centre-right Progressive Party.
Read more: 69% of Icelanders want Finance Minister Bjarni Benediktsson to resign
Early elections?
As the new cabinet was announced the government coalition parties announced they would cut the current term short, calling for elections in the fall. However, the leaders of the two parties have refused to give a firm date for the elections. Instead they have said the precise date will depend on how well their key legislative bills fare in Parliament. As the local news site visir.is reports, political opponents have characterized this as a thinly veiled threat to the parliamentary opposition to allow the two majority parties to steamroll controversial bills through the legislative process in exchange for an early election, a charge MPs for the Progressive and Independence parties deny.
Read more: Coalition parties want elections to be held this fall
Meanwhile the overwhelming majority of voters want early elections. According to a poll conducted by the Social Science Institute of the University of Iceland 51% of voters want elections this spring and 26% want elections this fall. Only 23% want elections next spring, when the four year term is up. The Icelandic National Broadcasting Service points out that if Bjarni Benediktsson, the Minister of Finance and chairman of the Independence Party, keeps his word and shortens the current term by one parliamentary session, elections will have to be held on October 22 or 27 at the latest.
The root of the problem: Growing economic inequality
Although the immediate cause of the protests and unrest in Iceland are the revelations in the Panama Papers and the growing unpopularity of the centre-right coalition government, the root cause lies much deeper. Many observers have pointed out that off-shore shell companies in tax havens like Tortola played a large role in the lead-up to the financial crash of 2008, a connection protesters have also made.
Growing economic inequality also plays an important role. Styrmir Gunnarsson, the former editor of the local newspaper Morgunblaðið said in an interview with the Icelandic National Broadcasting Service the protests were really an expression of deeper and more serious problems in Icelandic society. Changes to the fishing quota system and changes to the tax code during the 1990s as well as the privatization of the banks in the 1990s and early 2000, all of which took place during the a time when the Independence Party and the Progressive Party were in government, had led to a growing concentration of wealth, which had created: “I don’t think our small society can tolerate the levels of economic inequality which has emerged.
This past week hase been extremely eventful in Iceland. So, what do you need to know to make sense of things? We at Iceland Insider compiled this handy guide the events to help you get up to speed on local politics and what is likely to happen next.
The Panama Papers claim their first victim
On Tuesday Sigmundur Davíð Gunnlaugsson became the first Prime Minister in the history of Iceland to resign from office. Foreign media have paid close attention to the developments in Iceland, as Sigmundur was the first victim of the fallout from the leaking of the Panama Papers which outline the dealings of Panamanian law firm Mossack Fonseca.
Read more: Breaking: Embattled Prime Minister Sigmundur Davíð resigns
A slow-motion car crash
Sigmundur Davíð had come under growing fire from politicians from across the political spectrum, including members of his own party, after the airing of an interview with the Swedish TV station SVT where he was confronted over his connections to an off-shore company in the notorious tax-haven Tortola. Sigmundur was skewered on HBO by UK born comedian John Oliver, who described the interview as a “slow-motion car crash”.
Read more: John Oliver on TV interview with Iceland's former PM: like watching a slow motion car crash”
In what has now become his signature political style, Sigmundur, who has on numerous occasions complained his words and actions are misunderstood or misconstrued by the media, managed to handle his resignation in a way which created even greater confusion and frustration.
Read more: The farce continues: Now the PM implies the president lied
Read more: And the plot thickens: the Prime Minister claims he did NOT resign
Not the first to resign over the Panama Papers
Although the PM was widely reported as the first victim of the Panama Papers, he was actually the second Icelandic politician to resign over revelations in the document leak. Several hours before Sigmundur Davíð announced he would resign on Tuesday one of the highest ranking members of the conservative Independence party in Reykjavík, City Councilman Júlíus Vífill Ingvarsson resigned his seat on the City Council.
Read more: Councilman resigns, another pledges to cooperate with ethics probe as Panama Papers shake City Hall
Mass protests
The resignation came after as many as 22,000 people protested in front of the house of parliament (Iceland's total population is 330,000), on Monday, demanding his resignation. Despite the resignation of the PM, the protests have continued, as people demand the other two government ministers whose names appeared in the Panama Papers resign as well. The Minister of Finance and chairman of the conservative Independence Party, Bjarni Benediktsson, and the Minister of the Interior, Ólöf Nordal, also of the Independence Party, have both refused to resign. Protesters have also demanded parliament be dissolved and new elections be called.
The protests which are the largest since the mass protests which followed the banking crash of 2008, the so called “pots-and-pans revolution” of the winter of 2008-9, have become an inspiration for protesters in England, who have demanded UK Prime Minister David Cameron follow the example set by Sigmundur Davíð, and resign over revelations he had a shell company registered in an off-shore tax haven. Eiríkur Bergmann, a professor at the University of Iceland, told the local TV station Stöð 2, that the protests in Iceland had severely weakened Cameron.
Despite the continuing protests and significant pressure from members of the coalition parties, the conservative Independence Party and centre-right Progressive Party, political observers in Iceland believe it is unlikely there will be further resignations from the government or that elections will be held immediately, as the protesters demand. On Thursday the government weathered a vote of no-confidence submitted by the minority parties in parliament.
A new cabinet formed under a cloud of distrust, dwindling support
Sigmundur Davíð Gunnlaugsson tendered his resignation to the President of Iceland on Wednesday. A new cabinet, under the leadership of the vice-chairman of the Progressive Party, former Minister of Fisheries and Agriculture, Sigurður Ingi Jóhannsson, was announced. The cabinet, which met for the first time on Monday morning, enjoys the trust of just 26% of the voters, according to a new poll.
According to a poll, conducted by the polling firm Maskina an overwhelming majority of voters, 66%, say they have little or very little trust in the government. The new prime minister enjoys the trust of less than 20% voters, according to the poll. The decision by the former PM to step down has also failed to satisfy voters, as 80% also want to see him resign his seat in parliament. Sigmundur Davíð has neither resigned his seat in parliament nor his post as the chairman of the centre-right Progressive Party.
Read more: 69% of Icelanders want Finance Minister Bjarni Benediktsson to resign
Early elections?
As the new cabinet was announced the government coalition parties announced they would cut the current term short, calling for elections in the fall. However, the leaders of the two parties have refused to give a firm date for the elections. Instead they have said the precise date will depend on how well their key legislative bills fare in Parliament. As the local news site visir.is reports, political opponents have characterized this as a thinly veiled threat to the parliamentary opposition to allow the two majority parties to steamroll controversial bills through the legislative process in exchange for an early election, a charge MPs for the Progressive and Independence parties deny.
Read more: Coalition parties want elections to be held this fall
Meanwhile the overwhelming majority of voters want early elections. According to a poll conducted by the Social Science Institute of the University of Iceland 51% of voters want elections this spring and 26% want elections this fall. Only 23% want elections next spring, when the four year term is up. The Icelandic National Broadcasting Service points out that if Bjarni Benediktsson, the Minister of Finance and chairman of the Independence Party, keeps his word and shortens the current term by one parliamentary session, elections will have to be held on October 22 or 27 at the latest.
The root of the problem: Growing economic inequality
Although the immediate cause of the protests and unrest in Iceland are the revelations in the Panama Papers and the growing unpopularity of the centre-right coalition government, the root cause lies much deeper. Many observers have pointed out that off-shore shell companies in tax havens like Tortola played a large role in the lead-up to the financial crash of 2008, a connection protesters have also made.
Growing economic inequality also plays an important role. Styrmir Gunnarsson, the former editor of the local newspaper Morgunblaðið said in an interview with the Icelandic National Broadcasting Service the protests were really an expression of deeper and more serious problems in Icelandic society. Changes to the fishing quota system and changes to the tax code during the 1990s as well as the privatization of the banks in the 1990s and early 2000, all of which took place during the a time when the Independence Party and the Progressive Party were in government, had led to a growing concentration of wealth, which had created: “I don’t think our small society can tolerate the levels of economic inequality which has emerged.
