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Iceland's prime minister is gone and now protesters want the whole government to resign

Hundreds of demonstrators massed on the square outside parliament in Reykjavik, urging the entire centre-right government to quit.

Protesters in Reykjavik on Monday.
Protesters in Reykjavik on Monday.
Image: Brynjar Gunnasrson/AP/Press Association Images

ICELAND’S COALITION GOVERNMENT is turning a deaf ear to angry protesters calling for its resignation, a day after the prime minister stepped down over the Panama Papers scandal.

Hundreds of demonstrators massed on the square outside parliament in Reykjavik, urging the entire centre-right government to quit.

Inside, the two coalition partners met behind closed doors to discuss their path forward.

The coalition parties “have lost all their legitimacy, but I am sceptical they will leave of their own initiative. Time is on their side and it’s crucial for them to stay in power,” Gyda Margret Petursdottir, a 42-year-old teacher who came out to protest, said.

Valthor Asgrimsson (36) agreed, saying: “We need a fresh start for Iceland. Preferably with an election.”

But as they spoke, Agriculture Minister Sigurdur Ingi Johannsson, the deputy head of the centre-right Progressive Party led by outgoing Prime Minister Sigmundur Davíð Gunnlaugsson, announced that his party and the right-wing Independence Party had agreed to stay on running the country’s affairs.

“We have reached a conclusion” to maintain the coalition in power since 2013, he told reporters after a meeting with Gunnlaugsson.

Two other ministers named in leak

The name of the new prime minister is to be announced later today, as well as the makeup of the reshuffled cabinet.

Two other cabinet ministers named in the Panama Papers, Finance Minister Bjarni Benediktsson and Interior Minister Olof Nordal, could be replaced.

The prime minister, who did not appear in public today, stepped down from his post yesterday – becoming the first major political casualty to emerge from the massive leak of 11.5 million documents detailing hidden offshore accounts held by world leaders and celebrities.

The financial records, revealed by the International Consortium of Investigative Journalists (ICIJ), showed that Gunnlaugsson and his wife owned an offshore company in the British Virgin Islands and had placed millions of dollars of her inheritance there.

pm Former Prime Minister Sigmundur Davíð Gunnlaugsson Source: Brynjar Gunnasrson/AP/Press Association Images

The prime minister sold his 50% share of the company to his wife for a symbolic sum of $1 at the end of 2009, but he had neglected to declare the stake as required when he was elected to parliament six months earlier.

Gunnlaugsson said he regretted not having done so, but insisted he and his wife had followed Icelandic law and paid all their taxes in Iceland.

It has not been proven the couple stood to gain financially from the offshore holding, and the ICIJ noted only that Gunnlaugsson had “violated Iceland’s ethics rules”.

But the issue is particularly sensitive in Iceland, a country marked by the excesses of the 2000s when senior bankers used shell companies in tax havens to conceal their dealings in risky financial products and which ultimately led to the 2008 collapse of the nation’s three main banks.

‘They’re the real pirates’

The left-wing opposition, which presented a motion of no-confidence to parliament on Monday, wants early elections to be held ahead of the scheduled April 2017 vote.

The vote of no-confidence could be held tomorrow after a meeting of parties represented in parliament scheduled for 10.30am.

Riding high on Icelanders’ anger over the affair, the nascent Pirate Party has seen its support soar in the wake of the scandal.

A libertarian movement founded in 2012 and campaigning for more transparency in politics, internet freedoms and copyright reform, the Pirate Party garnered 43% of voter support in a Gallup poll conducted on Monday and Tuesday and published by daily newspaper Frettabladid and Channel 2 television.

“We are the Pirate Party, but these people are the real pirates, taking it all for themselves and hiding it on exotic islands,” Karl Hedinn, a 21-year-old member of the party’s youth wing, told AFP.

In recent weeks, the party had been polling between 25 and 35%.

“I think they have good chances, especially now. And why not try something new? … I wouldn’t mind trying something new,” a graphic designer who gave her name only as Sindri said.

The Gallup poll indicated the Independence Party would come in second place with 21.6%, and the opposition Left Green Movement in third with 11.2%.

Gunnlaugsson’s Progressive Party garnered just 7.9%, behind the opposition Social Democrats’ 10.2%.

© AFP 2016

Read: Iceland’s prime minister resigns in wake of Panama Papers controversy

Read: Father Ted’s famous protest sign has caused some confusion in Iceland

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