Iceland's prime minister Sigmundur David Gunnlaugsson appeared to resign yesterday, Tuesday, after huge demonstrations against his family's holding of millions of dollars in a tax haven.
His departure was announced but then, in a bizarre twist, a government spokesperson said that he was in fact being "temporarily relieved" of his post “for an unspecified amount of time”.
He seems unlikely to survive through such manoeuvres.
Some 23,000 people had protested in the capital Reykjavik demanding Gunnlaugsson resign for his actions. The protesters were angry that while he said he would deal with the “vultures” attacking Icelandic banks, his family’s company Wintris Inc was claiming millions of pounds of the assets of the bankrupt Icelandic banks.
Sigmundur David didn’t tell his parliament that he had sold his shares in the company to his wife, Anna Sigurlaug Pálsdóttir, for a dollar, or declare his personal interest while he negotiated a deal with the creditors.
This scandal only became public in the “Panama Papers” leak when millions of documents about the super-rich and their tax affairs were leaked from Mossack Fonseca, the company which specialises in helping rich people avoid tax.
Iceland’s government is a coalition of the Progressive Party and the Tories (the Independence Party). It is the Independence Party which is most closely associated with the privatisation of Iceland’s banks by its last PM David Oddson.
He was the driving force behind privatisation which created a huge speculation bubble and helped create the financial crash there in 2008. While a few bankers were jailed for corruption, the standard of living in Iceland dropped 50 percent.
Pensions and public sector jobs were slashed, businesses folded and thousands of people emigrated to find work abroad.
But mass strikes broke out last year involving up to 70,000 workers including doctors, nurses, midwives, radiologists, academics, vets and tourism workers. Although they won better wages, even now Icelanders’ standard of living is 25 percent lower than before the crash.
The Independence Party was able to recover in elections only because the Left-Green Alliance which was elected to fight corruption and financial chaos instead imposed brutal austerity.
Despite resigning as prime minister, Sigmundur David is still chair of the Progressive Party whose proposed replacement has been defending Sigmundur by explaining that, “it is complicated to have money in Iceland”. He means it’s easier for the rich to pay less tax abroad.
Ordinary people in Iceland have previously brought down a corrupt government, got rid of Sigmundur David Gunnlaugsson and staged mass strikes for better wages.
This shows the power ordinary Icelanders have to rid themselves of the parasites getting fat while they pay, and to end austerity.