In April 2016 there was a serious domestic political crisis when, in the course of the revelations launched by an international media association (» Panama Papers «) about the activities of mailbox companies, it became known that the Icelandic head of government was a co-founder or owner of such a company. Thousands protested in front of the parliament in Reykjavík on April 4th, 2016 and called for the resignation of Gunnlaugsson, who had also been elected because he wanted to restore the people’s confidence in the banking system after the severe financial crisis. President Grímsson rejected Gunnlaugsson’s proposal to dissolve parliament to hold new elections. Eventually he had to give up his position as head of government. The coalition agreed on the previous Minister of Agriculture, S. I. Jóhannsson, as interim successor. The Progress Party politician was sworn in as the new Prime Minister on April 7, 2016. The historian G. T. Jóhannesson, who appeared as an independent candidate, won the election for President on June 25, 2016 with 39.1% of the votes (took office: August 1, 2016). Incumbent Grímsson had, contrary to his original intention, refused to run again. Previously, his wife had been linked to an offshore company.
In the early parliamentary elections on October 29, 2016, the Independence Party was able to expand its leading position. She won 29% of the vote and 21 seats in the Althing. The one from the Panama Papers scandalThe Progress Party, which was particularly affected, suffered heavy losses. It only got 11.5% of the vote and 8 seats. The second strongest party was the Left Green Movement with 15.9% of the vote and 10 seats. The Pirate Party also won 10 seats with a share of 14.5% of the vote. The reform party, which was only founded in 2016, won 10.5% of the votes and entered the Althing with 7 members. After difficult coalition negotiations, the Independence Party, Reform Party and the Shining Future group, which had won 7.2% of the vote and four members of parliament, agreed to form a joint government. The new cabinet under the leadership of B. Benediktsson, the chairman of the Independence Party, officially took office on January 11, 2017. After cover-up allegations in connection with a controversial judicial matter of his father, the party withdrew its support to Prime Minister Benediktsson in September 2017 and thus triggered the break of the coalition after only eight months.
According to relationshipsplus, early parliamentary elections were held again on October 28, 2017, in which the previous governing coalition lost its majority. The Independence Party suffered losses, but with a gain of 25.2% of the votes and 16 seats in parliament, it remained the strongest force ahead of the Left Green movement, which got 16.9% of the votes and 11 seats. The reform party suffered heavy losses, winning only 6.7% of the vote and 6 seats. The shiny future party clearly failed with 1.2% of the vote because of the five percent clause. The Social Democrats were able to make significant gains, winning 12.1% of the votes and 7 seats. The Pirate Party lost significantly and only won 6 seats. S. D. Gunnlaugsson made the leap into the Althing with 10.9% of the votes and winning 7 mandates. For the first time, the People’s Party also moved into parliament. She won 4 mandates. The left-green, independence and progressive parties agreed to form a left-right coalition with K. Jakobsdóttir, the leader of the left-green movement, as head of government. The new cabinet, in which the previous Prime Minister B. Benediktsson became Minister of Finance and Economy, started work on November 30, 2017.
Jakobsdóttir started with the aim of regaining the people’s trust in politicians and politics and fighting corruption. It took a position against joining the EU and Iceland’s membership in NATO, but did not take any steps in this direction out of consideration for the coalition partners. Their economic and social policies are conventional. Despite contradicting party-political views within the governing coalition, it has so far proven to be stable. Urgent government tasks arose from problems with the rise in house prices, mass tourism and unemployment.
In December 2019, Prime Minister Jakobsdóttir said that she wanted to put the gross domestic product factor on a par with prosperity and inclusive growth. One of the reasons for this statement was an environmental problem, namely the first public “burial” of a glacier, the Okjökull, which had finally melted that year. She found like-minded people in the heads of government J. Ardern (New Zealand) and Nicola Sturgeon (* 1979) in the idea of promoting a “wellbeing economy” in which, in addition to economic performance, all aspects of welfare and quality of life are taken into account, Scotland). On the democracy index of the weekly newspaper »The Economist« Iceland was ranked 2nd in the world in 2019.
In spring 2020, Iceland’s government fought the Covid-19 pandemic (coronavirus) with extensive support from the population. In early April 2020, Iceland became the first European country to launch a mobile phone app to track the spread of viral infections.
In June 2020, incumbent pro-popular President GT Jóhannesson won the presidential elections again with a large majority (92.2%).