After the leak of the Panama Papers last week, many political and economic elites were linked to huge tax avoidance schemes. One of these elites was Icelandic Prime Minister Sigmundur Davíð Gunnlaugsson who has subsequently resigned. Gunnlaugsson’s departure was a consequence of a collective opposition to an established political class that believe that they can implement one rule for themselves and one rule for everybody else. The public outcry is encouraging as it shows that people across the world are gaining consciousness and revolting against a neoliberal elite.
The Icelandic Prime Minister was revealed to co-own a company called Wintris Incorporated, which was set up in 2007 in the British Virgin Islands. The purpose of the company was to hold investments for Anna Singurlaug Pálsdóttir, his wealthy partner and later wife. When the scheme was set up the couple were living in the UK and were advised to set up a company in order to invest substantial proceeds from the sale of Pálsdóttir’s family business back in Iceland. Gunnlaugsson owned 50% of Wintris for over two years and the other half of the company was owned, unsurprisingly, by Pálsdóttir.
When confronted with the links between himself and Wintres Incorporated in 2009, Gunnlaugsson gave an evasive answer: “Well, it’s a company, if I recall correctly, which is associated with one of the companies that I was on the board of”. It’s also worth pointing out that soon after this admission Gunnlaugsson ended the interview.
Following the revelations in the Panama Papers, Gunnlaugsson has resigned after the Icelandic president refused to dissolve parliament. This was prompted by two factors: legislative pressure, and public pressure. Law makers were preparing a vote of no confidence which forced Gunnlaugsson’s hand, and thousands of people took to the streets of Reykjavik demanding the PM’s resignation.
The leader of the Left-Green Movement, an eco-socialist opposition party, has continued calls for another election. The idea of another election isn’t out of the realms of possibility as, although President Ólafur Ragnar Grímsson has refused to dissolve Parliament, he used to be an elected politician for the People’s Alliance, a socialist party that the Left-Green Movement had split from. If Grímsson has retained his ideological preferences, it is not inconceivable that he would dissolve Parliament if it resulted in a more left-wing government.
Gunnlaugsson is the first political casualty of the Panama Papers. There have been other notable accusations relating to political figures and the response from people around the world has been encouraging. Tax avoidance is an issue that literally only big businesses and their political stooges support. Whether you are an outspoken socialist or a small business owner, tax avoidance is something that angers you because such schemes are so often linked with corrupt political leaders. The Panama Papers story will not go away as the revelations point to a glaring problem with the current world economic system. As more details are released the anger about corruption and injustice will only build, and the political ramifications for the current neoliberal political elite may well be fatal.