In Iceland, GDP growth is robust, government debt is rapidly shrinking, a budget deficit has turned into a healthy surplus, and unemployment has fallen to a mere two percent. And yet even there, as across Europe, populism is on the rise. One manifestation of that trend is the fact that the radical Pirate Party is in the pole position leading up to the historic parliamentary election on Saturday.
At the forefront of the political discourse during this election cycle has been welfare, such as the health-care system, which is in many ways at a breaking point; affordable housing, which is becoming increasingly difficult for young people to obtain; and the common perception that the country is moving in a less egalitarian direction. For example, data from Statistics Iceland show that last year, more than 40 percent of the total increase in wealth in the country wound up with the richest ten percent of the population. And data from Iceland’s Inland Revenue show that 20 percent of the country’s net wealth was held by the richest one percent in 2015, and just under 12 percent belonged to the top 0.1 percent. The actions of the current government—not least allowing a wealth tax to expire in 2014—have seemed to feed into this view.
The government also found itself navigating rough waters following the so-called Panama Papers revelations last spring. Documents leaked from the Panamanian law firm Mossack Fonseca revealed that Anna Sigurlaug Palsdottir, the wife of the Icelandic prime minister, Sigmundur David Gunnlaugsson, had kept her share of her family’s fortune in an offshore company known as Wintris, in the British Virgin Islands. Gunnlaugsson himself had owned half the company but then sold his shares to his wife months before he was elected to parliament in 2009.
Strictly speaking, Gunnlaugsson and his wife did not break any laws with these dealings. His handling of the situation, however—where he first denied having owned an offshore company and then angrily stormed off the set of a
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