outside parliament right now pic.twitter.com/DPAXL0j9xC — Halldóra Mogensen (@Halldoramog) April 4, 2016



Gunnlaugsson was the first world leader to be confronted directly about secret financial dealings detailed in the massive leak, abruptly walking out of Gunnlaugsson was the first world leader to be confronted directly about secret financial dealings detailed in the massive leak, abruptly walking out of a television interview with Sweden’s state broadcaster SVT on Sunday when asked to explain his own interest in Wintris , a company registered in the British Virgin Islands that had bonds in three Icelandic banks that collapsed in 2008.

The moment Iceland’s prime minister walked out of an interview because of a tax haven question #panamapapershttps://t.co/FfWj8jiQec — The Guardian (@guardian) April 4, 2016

Before Gunnlaugsson fled the room, under questioning by Johannes Kr. Kristjansson, founder of the crowd-funded investigative site Reykjavik Media, the first part of the interview was conducted in English by Sven Bergman of SVT. Those first four minutes — posted on YouTube by an Icelandic blogger, Lára Hanna Einarsdóttir — are worth watching in full for the skillful way Bergman got the prime minister to explain why his government so aggressively pursued tax dodgers.

“Well, it’s important to rebuild trust in Icelandic society, towards government, obviously, but also the financial system and our way of doing things,” Gunnlaugsson said. “We want to show that we are leaving no stone unturned.” “In Iceland, like in most Nordic societies,” he added, “we attach a lot of importance to everybody paying his share. Society is seen as a big project that everyone needs to take part in, so when somebody is cheating the rest of society it is taken very seriously.” That long buildup, which was also broadcast in full by Iceland’s RUV, made the culmination of the interview, when the prime minister refused to answer questions about not having disclosed his share in a shell company owned with his wife, all the more devastating. Within hours of the revelations, Gunnlaugsson and Wintris had become the subject of jokes and memes online.

“The hipp­est ice cream shop in town, Val­dís, is of­fer­ing a new ice cream flavour today: Wintris,” the Iceland Monitor reported on Monday. “‘It’s sour with a dose of arrog­ance and we don’t particul­ar­ly recomm­end it,’ says an advert on the Val­dís Face­book site. The ice cream is a mixt­ure of lemon sor­bet and vanilla ice cream and is availa­ble with a tax deducti­on.” Frederik Obermaier and Bastian Obermayer of Süddeutsche Zeitung, who first obtained the leaked documents from an unnamed whistleblower at the Panama-based law firm Mossack Fonseca, revealed on Sunday that Gunnlaugsson had failed to report his 50 percent stake in the shell company Wintris when he was elected to parliament in April 2009, an apparent breach of transparency regulations. Gunnlaugsson denied any wrongdoing in his response to the German newspaper’s questions about this, employing a novel defense. “He argued that companies that don’t really do any business are not subject to the regulation,” SZ reported. The German journalists also explained why the revelations could be particularly damaging to the prime minister, who was elected as a reformer: On December 31, 2009, Gunnlaugsson sold his half of Wintris to his partner Anna Pálsdóttir. According to the contract found in the Panama Papers, the company – worth millions – was sold for one U.S. Dollar. An affair involving an offshore company would be unpleasant for any head of government. But in Gunnlaugsson’s case it is a severe blow to his political integrity. His rise to power began as part of “InDefence,” short for “In Defence of Iceland,” a grassroots political movement that was born after the three Icelandic banks collapsed. One of its slogans was “Icelanders are NOT terrorists,” which was a response to the British government’s controversial reaction to the Icelandic banking crisis. After the insolvent Landsbanki was nationalized in the fall of 2008, Britain demanded that Iceland guarantee the savings deposits of British nationals. When the Icelandic central bank refused to comply, the British government tried to get the money back by freezing Icelandic assets on the spot. To do this, Britain used counterterrorism laws. In the blink of an eye, Scandinavia’s fallen star suddenly found itself in the same category as al Qaeda. Elected in 2009, Iceland’s center-left government attempted a compromise that would have included providing guarantees for British savings accounts. This enraged InDefence, and the movement’s supporters successfully rejected the government’s plans in three consecutive referendums on the matter. At the time, Gunnlaugsson seemed like a strong representative of the Icelandic people’s interests. Insiders have said that Gunnlaugsson didn’t mention to his fellow InDefence campaigners that his family held bonds worth millions at the three bankrupt banks. As the Reykjavík Grapevine noted, in dealing with the collapsed Icelandic banks, Gunnlaugsson has been “making decisions which directly affected creditors or, more bluntly, his wife’s company–clearly a conflict of interest.” Speaking on Icelandic television, the prime minister defended his covert financial arrangements as legal, and dismissed the idea that he should resign because of a crowd filling Austurvöllur square outside parliament.

“The entire population won’s be at Austurvöllur,” he said in advance of the gathering. That was undoubtedly true, even if estimates put the size of the crowd in excess of 20,000, which is close to 10 percent of Icelanders. The police in Reykjavik confirmed that the demonstration was one of the largest in the country’s history, according to RUV.

“What would be the most natural and the right thing to do is that he resign as prime minister,” Birgitta Jónsdóttir, a former WikiLeaks activist who represents the opposition Pirate party in parliament, told The Guardian. “There is great demand for that in society; he has totally lost all his trust and believability.” Gunnlaugsson’s determination to resist calls for his resignation might partly be explained by the fact that recent polling suggests that a snap election could well sweep the Pirates to power on a wave of anti-establishment anger.

Iceland: @PiratePartyIS polling at 36.1%, more than both ruling parties (Independence 23.2% and Progressive 12.1%)! pic.twitter.com/27wq2WXE0L — Benjamin Leruth (@BenLeruth) April 1, 2016

Discussing scenarios if there is a snap election with @PiratePartyIS pic.twitter.com/gJkkSKGAui — Arnaldur Sigurðarson (@Arnaldtor) April 4, 2016

The Panama Papers, a massive leak of more than 11 million documents, which has already implicated the leaders of other nations — including Russia, Ukraine, Saudi Arabia, and Pakistan — will continue to unfold in the days ahead. Süddeutsche Zeitung has produced a fascinating video report on its effort to sift through and make sense of the documents, in collaboration with dozens of other news organizations.