Panama Papers’ impact - Heads roll in Iceland

THE Panama Papers’ (PPs) shocking but, tragically, not really shocking revelation has had an immediate impact. Iceland’s prime minister Sigmundur David Gunnlaugsson has been forced to resign. Earlier yesterday, president Olafur Ragnar Grimsson rejected a request to dissolve the parliament and to call an election from Mr Gunnlaugsson.

Panama Papers’ impact - Heads roll in Iceland

Mr Gunnlaugsson was implicated in a conflict-of-interest scandal involving a claim of almost €4m against three failed Icelandic banks made by a British Virgin Islands company he and his wife set up. The claim was not made public, even though he was directly involved in preparing compensation legislation that would benefit the company.

Iceland, population 323,002, reacted immediately on publication of the PPs. Thousands of people protested outside parliament on Monday, demanding Mr Gunnlaugsson resign. Public anger meant he could not survive in a country that has sent at least 26 bankers or financiers to jail for combined sentences of 74 years over the destruction of their banks.

It was revealed yesterday that Irish developer Ray Grehan used Mossack Fonseca, the law firm at the centre of the PPs investigation, to hide assets from Nama. Mr Grehan did not tell Nama about his quarter share in a €50m Dutch casino when it took over his debts of €300m in 2010.

How might Iceland react to that disclosure? Much more importantly, how will we?

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