Iceland heads into its second snap parliamentary election in less than a year on Saturday with the financial crash that brought the country to its knees nearly a decade ago still playing out in its politics. The island’s economy is thriving again, thanks mainly to an unprecedented tourism boom, but some of its top politicians have been hit by a succession of financial and ethical scandals that have badly dented voters’ trust. The prime minister, Bjarni Benediktsson, called the election last month after his three-party government collapsed over an alleged attempt to cover up efforts by his father to help “restore the honour” of a convicted child sex offender. Benediktsson formed his centre-right coalition barely 10 months ago, following early elections triggered by his predecessor’s resignation. Sigmundur Davíð Gunnlaugsson had stepped down amid public fury at revelations in the Panama Papers that his family had sheltered money offshore.
The Guardian revealed this month that while an MP, Benediktsson – whose name also appeared in the Panama Papers – had himself sold millions of króna of assets in a major Icelandic bank’s investment fund as the state was about to seize control of the country’s failing financial sector at the peak of the 2008 crisis.
The prime minister, a member of one of Iceland’s wealthiest families, has denied any wrongdoing, but newly leaked documents suggest his relationship with Glitnir bank was close enough to raise serious questions about a possible conflict of interest between his roles as an MP and one of its most valued clients.