Iceland’s government collapses over bid to clear paedophile

Iceland’s nine-month-old government has collapsed after a small coalition partner quit over an attempt by the prime minister’s father to help clear a convicted paedophile’s name.

The centrist Bright Future party said in a Facebook post that “a serious breach of trust” prompted its departure.

Prime minister Bjarni Benediktsson took office in January with his Independence Party, the Reform Party and the centrist Bright Future party.

Together the three parties hold the slimmest of majorities – 32 of the 63 seats in parliament – following elections held last October after the former prime minister resigned amid protests over his offshore holdings. The holdings were revealed in the Panama Papers leak.

The Bright Future party has four seats in Iceland’s parliament, which is known as the Althingi.

Mr Benediktsson’s father, Benedikt Sveinsson, helped a convicted child molester apply for a clause in Iceland’s judicial system allowing a person who has served their sentence for a serious crime to “restore their honour” and seek employment again.

In 2004, Hjalti Sigurjon Hauksson was convicted of raping his stepdaughter almost every day for 12 years, and sentenced to five years in prison.

When it emerged that some government members, including its head, had kept information from the public about a letter seeking to expunge Hauksson’s record, the Bright Future party said it was quitting.

It is unclear whether Mr Benediktsson, a former finance minister who was also named in the Panama Papers as having held a stake in a Seychellesbased investment company, will seek to form a new coalition or will call new elections.

Iceland, with a population of 320,000, suffered years of economic upheaval after the country’s debt-swollen banks collapsed during the 2008 global financial crisis.

The collapse marked a major economic and political event in Iceland and came after the country’s three major privately owned commercial banks defaulted following their difficulties in refinancing their short-term debt and a run on deposits in the Netherlands and the United Kingdom.

Relative to the size of its economy, Iceland’s systemic banking collapse was the largest experienced by any country in history.

The crisis led to a collapse in the value of the Icelandic krona and a spike in unemployment. Iceland’s stock market plunged by more than 90 per cent.

newdeskts@scotsman.com