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Pirate Party Surges as Iceland Calls Early Elections and Names New PM

It's like watching a real life 'House of Cards,' said one Icelandic protester on Wednesday, as the country reacts to the Panama Papers scandal which has devastated the government.

by Reuters and VICE News
Apr 7 2016, 11:20am

Sigmundur David Gunnlaugsson arriving at parliament in Reykjavik on April 6, 2016. Photo by Birgir Thor Hardarson/EPA

Iceland's government named a new prime minister on Wednesday and called for early elections in the fall, a day after its leader Sigmundur David Gunnlaugsson became the first global politician brought down by the Panama Papers scandal.

A poll showed that if an election were held on Thursday it would be won by the anti-establishment Pirate Party, a stunning victory for a group set up by opponents of copyright enforcement rules.

It was unclear whether the naming of Fisheries Minister Sigurdur Ingi Johannsson to head the government or the call for early elections would satisfy the thousands of Icelanders who in street protests this week demanded the government resign immediately for early elections. The opposition has been trying to force a new election with a vote of no confidence in the government.

The Pirate Party, which campaigns in favor of transparency and direct democracy, has had a small following in several European countries for a few years but has never before come close to political power.

Related: The VICE News Guide to the Panama Papers

Gunnlaugsson quit as prime minister on Tuesday after leaked documents from Panamanian law firm Mossack Fonseca showed his wife owned an offshore company that held millions of dollars in debt from failed Icelandic banks. Iceland was devastated by the 2008 financial crisis, which caused its three biggest banks to collapse.

The government said the decision to hold elections in the fall would give it time to follow through on one of the biggest economic policy changes in decades — the ending of capital controls introduced to rescue the economy from the 2008 crisis.

Johannsson, who has also served as agriculture minister, told reporters the government would further pursue its big projects of the last three years, the largest being the abolition of capital controls.

Iceland has struggled to recover from the collapse of its highly indebted banks, which led to popular protests, the fall of a government, and the jailing of many bankers. Many Icelanders still harbor a strong distrust of their leaders.

'I feel like I am watching a live show of "House of Cards"'

A few thousand demonstrators, though fewer than earlier in the week, gathered for another evening of protests in front of the parliament building on Wednesday.

Protesters, already fed up with the financial and political elite, have gathered the last three nights in the capital Reykjavik, some pelting parliament with yoghurt and eggs.

The poll by Icelandic media outlet Visir on Wednesday showed a record 43 percent of those polled would cast ballots for the Pirate Party, an incredible rise for the Pirates who won 5.1 percent of votes in the 2013 election. That result gave them three seats in parliament including one for party leader Birgitt Jonsdottir, a poet and former WikiLeaks supporter who says revolution is her favorite word.

Related: The Panama Papers: Huge Protests in Iceland After Prime Minister Refuses to Resign

"I feel like I am watching a live show of House of Cards," Erla Gisladottir, a 32-year-old mother on parental leave, said ahead of the government's decision to call new elections, referring to the TV show about political intrigue.

"I'm here for many reasons," said Jon Thor Olafsson, a 33-year-old musician who protested near parliament on Wednesday. "To protest the arrogance of the government in its entirety and a ruined financial system in Iceland — as the outrageous number of Icelanders in the Panama Papers shows."

The Panama documents revealed that Gunnlaugsson's wife owned a previously undisclosed firm with what the government says is $4.1 million in claims on the island's collapsed banks. His opponents have said that represents a conflict of interest, because the government is negotiating the value of such claims.

The leaked documents from Panamanian law firm Mossack Fonseca, that specializes in setting up offshore companies, were unveiled this week by news organizations around the world, shining a light on the finances of global politicians and public figures.

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Related: Panama Papers Leak Taints David Cameron's Effort to Curb Massive UK Tax Avoidance