The fall of a white knight: why the Panama Papers forced Iceland’s PM Gunnlaugsson to quit

He came to power as a white knight riding a wave of anti-bank fury after Iceland’s financial crisis, but Sigmundur David Gunnlaugsson was forced to resign as prime minister Tuesday after hiding offshore holdings.

“Iceland has not been marked by class division in the same way as many other countries, and this is one of the many advantages of living here. But we cannot take it for granted that this will always be the case,” he said in an independence day speech on June 17, 2013.

Iceland PM quits as Panama Papers snare first resignation

Elected the country’s youngest-ever prime minister in 2013 at the age of 38, Gunnlaugsson was seen as a rising star of the centre-right Progressive Party, positioning himself as a staunch defender of Icelandic interests against international creditors in the aftermath of the country’s 2008 financial meltdown.

With a strong voter base in Iceland’s agricultural regions, he was seen as a refreshing change from the political old guard, which was accused of having turned a blind eye to reckless investments that had brought down the banking sector and left thousands of Icelanders mired in debt.

But the so-called Panama Papers, a massive leak of financial documents implicating politicians, celebrities and public figures worldwide, showed this week that Gunnlaugsson and his wife Anna Sigurlaug Palsdottir owned an offshore company in the British Virgin Islands and had placed millions of dollars there.