Panama Papers Update: Iceland’s Coalition Government To Face No-Confidence Motion Debate In Parliament

The Iceland government will face a no-confidence motion debate in parliament Friday over the massive data leak that revealed an offshore account link to Sigmundur David Gunnlaugsson, who stepped down as the country’s prime minister Tuesday after much pressure. Gunnlaugsson’s wife also had connections to the offshore account of a secretive company, the leak showed.

Icelandic opposition parties filed a fresh motion after the earlier one specifically targeted Gunnlaugsson. The country’s governing center-right coalition tried to conciliate public — protesting since the Panama Papers leak Sunday — by naming Sigurdur Ingi Johannsson as prime minister and promising for early elections in the autumn.

Although the government is facing widespread criticism following the leak, the ruling coalition of Progressive Party and the Independence Party enjoys a majority, controlling about two-thirds of the seats in the nation’s 63-strong parliament. However, latest polls put the Pirate Party in the lead with 43 percent of the vote, much ahead of the ruling coalition and other opposition parties.

“How are we going to reclaim our reputation if things just go back to normal?” Birgitta Jonsdottir, head of the Pirate Party, told Reuters. “We are the laughing stock in the international community because of the former PM. It's too little and too late.”

Gunnlaugsson and his wife reportedly bought a company in 2007 from the Panama-based law firm Mossack Fonseca, which is at the center of the exposé, through the Luxembourg arm of Landsbanki, considered one of Iceland’s three major banks. At the time, the couple was living in the United Kingdom and used the offshore company Wintris Inc. in Panama to invest profits from the prime minister's wife’s sale of shares in her family business.

However, Gunnlaugsson's office said Sunday the prime minister's portion of shares was incorrect, as “it had always been clear to both of them that the prime minister’s wife owned the assets.”

Iceland has witnessed protests by over 20,000 people this week following the leak, which is a large number for a country with population of about 330,000, according to organizers.