Iceland's PM resigns, first casualty of Panama Papers

Iceland's Prime Minister Sigmundur Gunnlaugsson resigned on Tuesday, becoming the first casualty of leaked documents from a Panamanian law firm, which shone a spotlight on the offshore wealth of politicians and public figures worldwide.

The Panama Papers showed the premier's wife owned an offshore company with big claims on Iceland's banks, an undeclared conflict of interest for Gunnlaugsson.

Reports say more than 11.5 million documents, leaked from the Panamanian law firm Mossack Fonseca.

The linking of the premier’s wife to the banks infuriated many who hurled eggs and bananas in street protests calling for him to step down.

The banks collapsed as the global financial crisis hit in 2008 and many Icelanders blamed politicians for not reining in their debt-fuelled binge and averting a deep recession.

The leaks have caused public outrage over how the world's rich and powerful were able to stash their wealth and avoid taxes while many people suffered austerity and hardship.
Mossack Fonseca, which specialises in setting up offshore companies, denies any wrongdoing.

On Tuesday, the Panamanian government sought to defend the country's reputation.

Panama President Juan Varela's chief of staff told a news conference that the government could retaliate after France announced it would put the Central American country back on its blacklist of uncooperative tax jurisdictions.

The official, Alvaro Aleman, said that no Panamanian company had been found to have committed a crime.

"We are not going to allow Panama to be used as a scapegoat by third parties. Each country (implicated) is responsible.

``The president had instructed the foreign ministry to contact all of the dozens of countries implicated,”Aleman said.

Among those named in the documents were friends of Russian President Vladimir Putin, relatives of the leaders of China, Britain and Pakistan, and the President of Ukraine. (Reuters/NAN)