Reykjavik: Iceland is facing its second snap election in about a year after the Independence Party-led government collapsed over a scandal involving grants of clemency to convicted child molesters.

Prime Minister Bjarni Benediktsson on Saturday called for elections to be held on Nov. 4, in a live broadcast from the president’s residence. The move comes after he was abandoned by his coalition partners, the four-lawmaker Bright Future, and the Reform Party, which has eight legislators.

Benediktsson said in an interview on Friday that he would seek to continue as party leader, and that he believes the Independents can “gain strength" in an election. “There is a lot of turbulence at the moment," he said. But “I think that when the dust settles people will see there is no corruption, there is no hiding of evidence."

The coalition that collapsed had only a one-seat majority in parliament, and was cobbled together earlier this year after long negotiations. Iceland’s previous government unraveled when then Prime Minister Sigmundur David Gunnlaugsson became the most high-profile casualty of the so-called Panama Papers.

The Bright Future party accused the premier of committing a “breach of trust" after failing to inform the rest of the government that his father had written a letter vouching for the character of a convicted child molester so he could apply for a legal “clean slate." The issue has been much in the news in Iceland, where convicted pedophiles can apply to have their record expunged.

“That goes against our policies here at Bright Future on transparency and a good way of working," said Ottarr Proppe, head of the Bright Future party.

Calls for a snap election were made by most of the other parties in parliament, including the Pirate Party which also demanded a vote on constitutional changes and called the Independence Party “unfit for government."

Reykjavik was the site of major street demonstrations both after the country’s economic collapse in 2008 and last year following the revelations of the Panama Papers. Benediktsson’s name also surfaced in connection with that scandal, but he said he had previously disclosed his offshore holdings.

The premier said on Friday that he was “shocked" to hear of his father’s letter, never tried to conceal anything and was never part of the decision process in the cases in question.

“Iceland’s Jimmy Savile case: Our PM, who was in the Panama Papers, has hidden for two months his father’s support for a pedophiles clemency," Smari McCarthy, a Pirate Party member of parliament, said on Twitter.

The turmoil has surfaced just as the coalition was presenting the budget to parliament and meetings were canceled in the legislature on Friday. Iceland’s economy is booming after the government earlier this year dismantled the last of the capital controls that had been in place since 2008.

The krona slid as much as 1.7 percent against the euro on Friday as the political turbulence took its toll on markets.

“I believe that we will get past this very fast," Benediktsson said. “The outlook for Iceland is very bright and strong."

The current coalition was formed in January after two months of negotiations as the Independence Party, which resisted a challenge from the populist Pirate Party to win the most votes in an Oct. 29 snap elections, replaced its traditional coalition party, the Progressive Party, with the two new junior allies. It controls 32 seats in the 63-member parliament.

The PM’s father, Benedikt Sveinsson, on Thursday released a statement apologizing for signing the “restored honor" letter. “What was supposed to be a small gesture of good will towards a convicted criminal has instead turned into a continuation of the tragedy for his victim. For this I again apologize," he said in an emailed statement. Bloomberg

Brendan Scott and Stephanie Phang contributed to this story.

Close