Iceland’s president weighs PM’s bid to dissolve parliament

Country reels over possible conflict of interests after Panama Papers reveal its premier set up an offshore company

By AP 5 April 2016, 6:21 pm

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People gather to demonstrate against Iceland's Prime Minister Sigmundur David Gunnlaugsson, in Reykjavik on Monday April 4, 2016, after documents leaked in a media investigation linked him to an offshore company that could represent a serious conflict of interest, according to information leaked from a Panamanian law firm at the center of an international tax evasion scheme. (AP Photo/Brynjar Gunnarsson).

REYKJAVIK — 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 center-right Progressive Party and the Independence Party.

Iceland's Prime Minister Sigmundur David Gunnlaugsson speaks during a parliamentary session in Reykjavik on Monday April 4, 2016. (AP Photo/Brynjar Gunnarsson) — Iceland’s Prime Minister Sigmundur David Gunnlaugsson speaks during a parliamentary session in Reykjavik on Monday April 4, 2016. (AP Photo/Brynjar Gunnarsson)

“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.