Following the release of thePanama Papers, he announced on 5 April 2016 that he would resign as prime minister amid public outrage at him for owning an offshore company to shelter money and not disclosing that when entering parliament.[2] On 7 April 2016, he was replaced as prime minister bySigurður Ingi Jóhannsson, who also replaced him as chairman of theProgressive Party on 2 October 2016, following a defeat after he had campaigned to continue as leader.[1] Just before the2017 parliamentary election, he left the Progressive Party and founded theCentre Party; and is currently that party's leader.
Sigmundur Davíð became a news reporter for Iceland'sstate broadcasting service in May 2000 before working on the current affairs programKastljós intermittently from 2002 to 2007.[7] He was president of the Nordic Economics Students' Union from 2000 to 2002 and a member of the Reykjavík City Planning Council from 2008 to 2010.[5]
Sigmundur Davíð first rose to prominence in Iceland as a spokesperson for theInDefence movement, which fought foreign creditors' attempts to make Iceland pay £2.3 billion in compensation to the United Kingdom and the Netherlands following thecollapse and subsequent nationalisation of Iceland's three banks. AsEirikur Bergmann wrote inThe Guardian, "This was the most serious diplomatic crisis the country had ever fought and Gunnlaugsson was at the forefront of it."[8] He and his wife Anna Sigurlaug Pálsdóttir already owned theoffshore company Wintris at the time, having bought it in 2007 from Mossack Fonseca through the Luxembourg branch ofLandsbanki and registered it in theBritish Virgin Islands.[9]
He was elected chairman of the Progressive Party on 18 January 2009 with 40.9% of party member votes, beatingHöskuldur Þórhallsson (37.9%).[10] On 22 January 2009, Sigmundur Davíð proposed the support of the Progressive Party's seven votes in the Althing for a minority coalition between theSocial Democratic Alliance and theLeft-Green Movement, as an alternative to the ruling coalition between theIndependence Party and the Social Democratic Alliance, with the aim of forcing early elections.[11] The next day, Prime MinisterGeir Haarde announced elections for 9 May 2009, in which for health reasons he would not be a candidate.
The unstablekróna during the banking and financial crisis led some to propose adopting the euro. ButJürgen Stark of theEuropean Central Bank said this would require joining theEuropean Union.[12] As of May 2012, Iceland did not meet any of the convergence criteria.[13] The country managed to comply with the deficit criteria in 2013 and had begun to decrease itsdebt-to-GDP ratio,[14] but still had elevatedHICP inflation and long-term governmental interest rates.[15][16]
In the27 April 2013 Althing elections, the Progressive Party and Independence Party each won 19 seats.[17] On 30 April PresidentÓlafur Ragnar Grímsson asked Sigmundur Davíð to form a new government.[18] On 23 May 2013, Sigmundur Davíð, as chairman of the Progressive Party, became Iceland's new prime minister while the leader of theIndependence Party,Bjarni Benediktsson, took up the position of Minister of Finance and Economic Affairs.[19] At 38 years old, Sigmundur Davíð was the youngest prime minister in the history of theIcelandic Republic and the world's youngest democratically elected head of government at the time.[20]
Sigmundur Davíð said in 2013 that talks withcreditors were proceeding more slowly than he would like. Many of the banks' original creditors sold the debt at a steep discount to foreignhedge funds, and awritedown was "necessary" because paying off all of the banks'liabilities would cause currency collapse because of the amount of Icelandic krónur that would be converted in making the payments.[21]
Sigmundur Davíð was interviewed in April 2016 by theSwedish television stationSVTs investigative programmeUppdrag granskning.[23][24] The interviewer told Sigmundur Davíð that the interview would focus on Iceland's recovery afterits financial crisis. During this interview, Sigmundur Davíð said it was very important for everyone to pay a fair share into society and that paying less than one's share constituted cheating society.[23][25]
When the interviewer asked if he had any connections to a foreign company, he replied that his financial assets had always been reported transparently. When asked specifically about his connections toWintris, a foreign company and a creditor of failed Icelandic banks, he said he had disclosed all requested information to the government and was unsure how the transactions actually worked.[23] Sigmundur Davíð then said the interviewer was making something suspicious out of nothing, and walked out of the interview.[24][26] He and his wife both made public statements about "journalist encroachment in their private lives" and insisted their disclosures were complete.[25]
News coverage of the release of thePanama Papers had revealed that he and his wife shared ownership of Wintris, bought to invest his wife's inheritance, and also that Sigmundur Davíð had failed to disclose his 50% share when he entered theparliament in 2009. Eight months later, he sold his share of the company to his wife for one US dollar,[27][28] the day before a new law took effect that would have required him to disclose his ownership as a conflict of interest.[29]
In 2015, he entered into an agreement with the creditors offailed Icelandic banks, including his wife.[30] According toRÚV, Wintris Inc. has registered a claim of ISK 174 million (US$1.37 million, €1.23 million) as a bond holder against the assets of the bankruptcy estate ofLandsbanki. It is claiming a total of 515 million Icelandic krónur (£3m) between the three failed Icelandic banks: Landsbanki,Glitnir, andKaupthing.[29] These banks had a total business volume nine times Iceland's gross domestic product just before they collapsed and the country had to obtain a loan from the IMF to stabilise its currency. The króna collapsed after the bank failure, which led to very high inflation of 18% to 20% for six months to a year.[31]
Following the Panama Papers revelations, there were widespread calls for Sigmundur Davíð to resign. Former Prime Minister of IcelandJóhanna Sigurðardóttir was among those making them.[32] Sigmundur Davíð said he would not resign. He apologised for his behaviour during the interview however, saying that he should not have left. Under growing pressure, with largeanti-government protests in front of the parliament,[33] and calls for a snap election from theAlthing, Sigmundur Davíð asked PresidentÓlafur Ragnar Grímsson todissolve parliament. He refused, noting he "was not ready to agree to [dissolving parliament] until [he] had discussions with the leaders of other parties on their stand".[34]
Sigmundur Davíð stepped aside as Prime Minister on 5 April 2016.[33] Shortly after initial reports of Sigmundur Davíð's resignation, the Prime Minister's office in Iceland issued a statement to the international press saying that Sigmundur Davíð had not resigned, but rather stepped aside for an unspecified amount of time and would continue to serve as the Chairman of theProgressive Party.[35][36] He refused to talk to theIcelandic National Broadcasting Service, and called police when he found reporters fromAftenposten waiting for him at his home.[37]
Ingólfur Bjarni Sigfússon of the Icelandic National Broadcasting Service told an Australian news program that the lesson of the Panama Papers is that "people aren't ready to accept their double morality, that one set of rules applies to us and another set applies to them. They better play by the rules, they better be honest, they better pay their taxes, they better not try to use their positions to curry favour with someone or privatise state belongings."[30] Iceland's government namedSigurður Ingi Jóhannsson as interim Prime Minister on 6 April 2016 and called for early autumn elections, effectively ending Sigmundur Davíð's role as PM. It was suggested that autumn elections would give the government "time to follow through on one of the biggest economic policy changes within Iceland in decades".[38]
Since his resignation as Prime Minister and loss of his party chairmanship, Sigmundur Davíð has repeatedly asserted that he was the victim of a global conspiracy to bring him down.[39] He has implied thatGeorge Soros, "banking elites", theSwedish public broadcaster, theInternational Consortium of Investigative Journalists and theIcelandic public broadcaster conspired against him.[39][40][41] In February 2017, Sigmundur Davíð said that there had been a "hostile takeover" of the Progressive Party and that the current leadership of the party no longer reflects the will of the majority of the party members.[42] In March 2017, Sigmundur Davíð further alleged that theSVTsUppdrag granskning interview was "falsified", and that the interviewers had practised how to confuse him as much as they could.[43]
In September 2017, after the announcement of a snap election, Sigmundur Davíð stated in an open letter on his website that he was seeking to form a new political party before the2017 Icelandic parliamentary election.[44] His new party, theCentre PartyMiðflokkurinn, has been described as "populist".[45] Miðflokkurinn finished fifth in the2017 parliamentary election with seven candidates, including Sigmundur Davíð, being elected to theAlthing. It received 10.9% of the vote, slightly ahead of the Progressive Party. Since 2017, Sigmundur Davíð has been a member of the Icelandic Division of the International Parliamentary Assembly.[46]
In December 2018, a leaked recording captured four Centre Party MPs, including Sigmundur Davíð, mocking a disabled woman and other women using denigrating and sexually charged language.[47] The scandal became known as theKlaustur Affair.
Sigmundur has spoken strongly against theEuropean Union's third energy packet and argued that its main purpose would be EU domination of Icelandic energy sources. He also argued that the third energy packet would be in contradiction of the Icelandic constitution. In the spring of 2019 the Centre party heldfilibuster speeches for over 130 hours about the subject in the Althing.[48] In July 2019, he criticised theParis Climate Accords as pointless, despite having signed it himself during his premiership, and argued that actions taken to curb climate change will not have an impact.[49]
His party faced a big defeat in the2021 parliamentary election, with the party only receiving 5.4% of the popular vote and three elected MPs, with a lot of theories being that people stopped trusting the party following the Klaustur Affair and the third energy packet filibuster.
Sigmundur Davíð and Anna Sigurlaug lived in the United Kingdom whenWintris was established, Anna Sigurlaug said in a Facebook post on 15 March. She said it was unclear at the time whether the couple would return to theUK or move to Denmark.[51]
According toVísir, Anna Sigurlaug is one of Iceland's wealthiest women; she received a share of the proceeds when her father, who owned the soleToyotadealership in Iceland, sold it in 2005.[51]
^ab"Iceland's PM says he will not resign in Panama Papers scandal".The Belfast Telegraph. 4 April 2016. Retrieved4 April 2016.He allegedly sold his half of the company to Palsdottir for one US dollar on 31 December 31, 2009, the day before a new Icelandic law took effect that would have required him to declare the ownership of Wintris as a conflict of interest.