Reykjavik, Iceland – Iceland’s Prime Minister Sigmundur David Gunnlaugsson resigned on Tuesday. His decision came public two days after he was exposed in the leaked documents from the Panamanian law firm Mossack Fonseca for tax avoidance.
The Panama Papers revealed that Gunnlaugsson’s wife owned an offshore company which had big claims on the nation’s banks. Many people took part in street protests calling for the prime minister to step down, according to a report by Reuters.
The 2008 financial crisis led the banks to collapse and many Icelanders accuse the government of failing to avert a severe recession. Gunnlaugsson asked President Ólafur Grímsson to dissolve parliament hours before resigning, meaning that a new election is likely to be held soon in Iceland.
Sigurdur Ingi Johannsson, the deputy leader of the former prime minister’s Progressive Party, said that he had plans to succeed Gunnlaugsson. He told reporters that the party would suggest to coalition partners in the Independence Party that he should become the next Iceland’s prime minister.
But opposition leaders said they wanted a general election, which most likely will result in the victory of the anti-establishment Pirate Party, opinion polls reveal.
The Panama Papers have risen global concern about corruption
The more than 11.5 million leaked documents have exposed a large number of politicians around the world who have relied on offshore companies set up by the Panamanian law firm as an attempt to avoid taxes.
Mossack Fonseca has denied any wrongdoing, supported by the Panamanian government which vowed to defend the country against accusations. France announced it would put Panama back on its blacklist of uncooperative tax jurisdictions and the Central American country responded by saying it could retaliate.
Alvaro Aleman, President Juan Carlos Varela’s chief of staff, claimed at a news conference that there was no evidence that a Panamanian company had committed a crime.
“We are not going to allow Panama to be used as a scapegoat by third parties. Each country (implicated) is responsible”, Aleman stated, as quoted by Reuters.
He added that the foreign ministry had been instructed to contact all countries involved in the Panama Papers.
Mossack Fonseca’s leaked files include Russian President Vladimir Putin, the president of Ukraine, relatives of the leaders of Britain, China and Pakistan. Opponents of British Prime Minister David Cameron accused him of letting wealthy figures avoid their taxes.
Reporters around the world are skeptical about the fact that few American names appear in the leaked documents. President Barack Obama commented that tax avoidance was a major global issue and called for the U.S. Congress to take measures to prevent American companies from avoiding paying taxes by taking advantage of loopholes.