Iceland's governing coalition has named Sigurdur Ingi Johannsson as the new prime minister after former leader David Gunnlaugsson stepped down in the wake of the leaked Panama Papers. The right-wing bloc said Johannsson, currently the agriculture and fisheries minister, would seek the president's approval shortly.
Johannsson, the deputy chair of the Progressive Party (PP) and a close ally of Gunnlaugsson, is expected to be sworn in later in the day. Finance Minister Bjarni Benediktsson, the chief of Iceland's Independence Party which is the junior partner of the coalition, also announced that early elections would be held in the autumn. Polls were originally scheduled to take place in the spring of 2017.
"We're going to take more steps... to deal with this situation and then hold elections in the autumn," assured Benediktsson, speaking from inside the Parliament.
Johannsson and Benediktsson said they would work together in the coming days over the specifics of the cooperation between the two coalition partners. Benediktsson's spokesperson confirmed to the local media that he would remain as the finance minister but that other ministerial appointments would be announced later. The cabinet reshuffle, which also helps the ruling coalition avoid a snap ballot, occurs amid a public outcry.
Gunnlaugsson became the first casualty after the explosive leaks of confidential documents from Panamanian law firm Mossack Fonseca surfaced. The disclosures of up to 11 million documents revealed how the rich and powerful across the world hide their wealth, potentially to evade taxes.
The leaked documents showed Gunnlaugsson had owned an offshore account along with his wife. Though Gunnlaugsson has denied any wrongdoing, he is accused of concealing his family's wealth worth millions of dollars, leading to widespread protests.
The PP has insisted Gunnlaugsson has not resigned but merely "stepped aside". A party statement said: "The prime minister has not resigned and will continue to serve as chairman of the Progressive Party." The pressure on Gunnlaugsson to step down increased after thousands of protesters took to the streets in capital Reykjavik in one of the rare mass protests in Iceland.