Iceland’s Pirate Party stands to gain from Panama Papers mess

Birgitta Jonsdottir is the leader of the Pirate Party, which now leads polls in Iceland. (Facebook)
Birgitta Jónsdóttir is the leader of the Pirate Party, which now leads polls in Iceland. (Facebook)

In a normal environment, elections would be due in Iceland only in April 2017.Iceland Flag Icon

But after its prime minster, Sigmundur Davíð Gunnlaugsson, suddenly resigned on Tuesday the small Nordic country could be headed to snap elections. If so, the beneficiary is likely to be the new Píratar (the Pirate Party), a protest movement rooted in the values of direct democracy and transparency, that would, if elected, grant Edward Snowden Icelandic citizenship.

It’s a relatively new party formed in 2012 by Birgitta Jónsdóttir, a former Wikileaks official and social activist first elected as an MP in 2009 from the Citizen’s Movement that emerged out of the ashes of Iceland’s banking crisis and reelected as one of three Pirate MPs in 2013. The party is a motley protest group of hacktivists, anarchists and other outsiders. Staunchly in favor of greater privacy for individuals and more transparency in government, the Pirates want to reduce the working week to 35 hours and liberalize drug legislation.

The weekend’s ‘Panama Papers’ leak revealed that the Icelandic prime minister and his wife owned an offshore company, Wintris, with over $4 million in assets. More damning, the company is a creditor to all three Icelandic banks that collapsed in 2008 and 2009. Previously undisclosed, the company’s existence (and its stake in Iceland’s failed banks) amounts to an unpardonable conflict of interest, given the role that Gunnlaugsson’s government has played in sorting out the post-collapse claims from remaining creditors against those three banks. Gunnlaugsson, who took steps to transfer the interest in the offshore company to his wife, never publicly acknowledged that Wintris was, in fact, one of those creditors, even as he campaigned on negotiating a hard line against those creditors.

Gunnlaugsson came to power after the April 2013 elections, in which his economically liberal Framsóknarflokkurinn (Progressive Party) narrowly trailed the more established, center-right Sjálfstæðisflokkurinn (Independence Party), ushering out a left-wing government elected in the aftermath of Iceland’s banking collapse.

Though the Independence Party actually won slightly more support in 2013, Gunnlaugsson won the premiership in part because the Independence Party, in power from 1991 until the 2009 financial crisis, remained such a toxic force in Icelandic politics.

Davíð Oddsson, prime minister from 1991 to 2004, was serving as chair of the Central Bank of Ireland’s board of governors at the time of the crisis. Geir Haarde, prime minister from 2006 to 2009, when the crisis struck, was actually indicted by the Alþingi (Althing), Iceland’s parliament, on criminal charges of negligence, and he was ultimately convicted of minor charges in 2012. (The current government appointed him as Iceland’s ambassador to the United States in 2015).

As Iceland’s financial crisis tumbled into mass unemployment, a currency crisis and diplomatic hassles, the Icelandic electorate turned sharply against Oddsson, Haarde and the entire Independence Party establishment. Its current leader, Bjarni Benediktsson, had to settle for becoming the finance minister in 2013. One reason that he hasn’t become prime minister today is that he, too, was involved with a shell company, pursuant to the Panama Papers leaks, though not as a direct owner.

By the time 2013 arrived, however, Iceland’s economy was on the upswing, and voters had wearied of prime minister Jóhanna Sigurðardóttir’s broad-stroke attempts to remake the government, including what became a ‘crowd-sourced’ push to rewrite the constitution and an application for admission to the European Union.

The lingering distrust of the Icelandic right, and the perceived failures of the Icelandic left, help explain why the Pirates have become so viable.

Under Gunnlaugsson, the Independence-Progressive alliance quickly terminated negotiations with the European Union over admission, and as Iceland’s economy improved, the government last June started lifting the currency controls imposed for seven years on the Icelandic kronur, perhaps the crowning achievement of the Gunnlaugsson years.

Widespread protests forced Iceland's prime minister Sigmundur Davíð Gunnlaugsson to resign within 48 hours of the Panama Papers release.
Widespread protests forced Iceland’s prime minister Sigmundur Davíð Gunnlaugsson to resign within 48 hours of the Panama Papers release.

Unless the Icelandic president, Ólafur Ragnar Grímsson, consents to snap elections (given the Pirate Party’s support, it’s easy to see why he has refused to consent), Sigurdur Ingi Jóhannsson, another member of the Progressive Party and, previously, the minister for fisheries and agriculture, will continue as prime minister, even as Gunnlaugsson continues as party leader.

It’s unclear that a new Progressive prime minister will allay the anger of an electorate that now feels like it’s been duped twice in eight years, and Jóhannsson seems destined to serve as a lame-duck caretaker until the next parliamentary election.

Even before the scandal broke, the Progressives had become increasingly unpopular, falling far behind the Independence Party in polls. But the Pirates, however, have held a double-digit lead since last spring. Though several ‘Pirate’ parties emerged in Europe in 2012 and 2013, most notably in Germany, few of them had any staying power.

Iceland’s, however, has been the exception.

Stridently in favor of open government and transparency, the Pirates have long been at odds with the kind of cozy elite connections that the Independence Party represented and the Gunnlaugsson scandal is now once again revealing. But they are also more libertarian than Iceland’s traditional center-left party, the Samfylkingin (Social Democratic Alliance). The Pirates, for example, are agnostic about EU accession, but they firmly believe that any decision should be made in line with a democratic mandate from Iceland’s electorate — the party argues that Gunnlaugsson broke a promise to consult Icelandic voters before terminating EU negotiations, for example.

Even before the Panama Papers emerged, it seemed likely that the Pirates might win Iceland’s next election. Now, with disenchantment at even higher levels today than in 2009 (the Monday protests against Gunnlaugsson were even more fervent than those against Haarde at the height of the crisis) it’s even more likely.

Iceland, with a population of just 325,000, isn’t going to portend great trends for the rest of Europe. But the success of the Pirates, especially if Jónsdóttir winds up as the next prime minister, is another sign that the constellation of ideologies and political parties across the continent has changed, with the rise of far-right eurosceptics in western and northern Europe, hard-left socialists in Spain, Greece and elsewhere, independence-minded nationalists in Scotland, Catalonia and beyond and, like in Iceland, pockets of anti-establishment rebels.

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