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Panama Papers leak: Iceland president rejects PM’s call for new election

panama papers Updated: Apr 05, 2016 19:49 IST
AP
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Iceland’s Prime Minister Sigmundur David Gunnlaugsson (R) attends a session of parliament in Reykjavik, Iceland on April 4, 2016. The PM is facing calls to resign after leaked "Panama Papers" tax documents showed he and his wife used an offshore firm to allegedly hide million-dollar investments. (AFP)

Iceland’s president on Tuesday refused a request from the prime minister to dissolve parliament and call a new election amid a dispute over the premier’s offshore tax affairs.

Embattled Prime Minister Sigmunder David Gunlaugsson is facing growing calls for him to step down because of reported offshore financial dealings by him and his wife that opposition lawmakers say show a massive conflict of interest with his job.

Thousands of Icelanders protested outside parliament on Monday, demanding that Gunlaugsson resign, and a similar protest is planned for Tuesday evening. The prime minister will meet with parliament in a session Wednesday that is sure to be dominated by the topic.

President Olafur Ragnar Grimsson, however, said he wants to consult with other party leaders first before agreeing to end the coalition government between Gunlaugsson’s centre-right Progressive Party and the Independence Party.

“I need to determine if there is support for dissolving (parliament) within the ruling coalition and others. The prime minister could not confirm this for me, and therefore I am not prepared at this time to dissolve parliament,” Grimsson said.

He said he plans to meet with the government’s coalition partner “in a few hours” to discuss the crisis.

Leaked financial documents allege that the prime minister and his wife set up a company in the British Virgin Islands with the help of a Panamanian law firm. Gunlaugsson is accused of a conflict of interest for failing to disclose his involvement in the company, which held interests in failed Icelandic banks that his government was responsible for overseeing.

He has denied any wrongdoing.