Iceland's Pirate Party in position to seize power after Panama Papers scandal brings down PM

People demonstrate against Iceland's Prime Minister Sigmundur David Gunnlaugsson in Reykjavik, Iceland on April 5, 2016.
People demonstrate against Iceland's Prime Minister Sigmundur David Gunnlaugsson in Reykjavik, Iceland on April 5, 2016.PHOTO: REUTERS

REYKJAVIK (AFP) - The global scandal over hidden offshore accounts that brought down Iceland's prime minister has propelled the Pirate Party into position to seize power if a snap election is called, a poll showed on Wednesday (April 6).

Founded in 2012, the Pirate Party, a libertarian movement campaigning for more transparency in politics, Internet freedoms and copyright reform, garnered 43 per cent of voter support in a Gallup poll conducted on Monday and Tuesday and published by daily Frettabladid and Channel 2 television.

In the weeks prior to the leak of the so-called Panama Papers on public figures' offshore financial dealings, the Pirate Party had been credited with between 25 per cent and 35 per cent.

The poll suggested Iceland's junior coalition member, the rightwing Independence Party, would come in second place with 21.6 per cent, and the opposition Left Green Movement in third with 11.2 per cent.

The centre-right Progressive Party of outgoing prime minister Sigmundur David Gunnlaugsson garnered just 7.9 per cent, behind the opposition Social Democrats' 10.2 per cent.

"We owe a lot to our prime minister. This kind of scandal was unexpected," Pirate Party spokesman Sunna Arvarsdottir told AFP.

Mr Gunnlaugsson announced on Tuesday that he was stepping down from his post, becoming the first major political casualty to emerge from the Panama Papers scandal.

His deputy, Fisheries and Agriculture Minister Sigurdur Ingi Johannsson, was to take over as acting prime minister for an "unspecified amount of time" - either until the next scheduled general election in April 2017 or until a snap election is called.

The left-wing opposition has insisted on an early election, noting that the finance and interior ministers, both of the Independence Party, have also been named in the Panama Papers.

The documents revealed by the International Consortium of Investigative Journalists (ICIJ) showed that Mr Gunnlaugsson and his wife owned an offshore company in the British Virgin Islands and had placed millions of dollars of her inheritance there.

The prime minister sold his 50 per cent share of the company to his wife for a symbolic sum of US$1 at the end of 2009, but he had neglected to declare the stake as required when he was elected to Parliament six months earlier.

Mr Gunnlaugsson has said he regretted not having done so, but insisted he and his wife had followed Icelandic law and paid all their taxes in Iceland.

The ICIJ noted only that he had "violated Iceland's ethics rules".