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It wasn't the Panama Papers that sank the Icelandic government (though it should). It was something much more sordid.

Former Prime Minister Bjarni Benediktsson's father signed a letter recommending that a convicted paedophile, Hjalti Sigurjón Hauksson who had been convicted of raping his stepdaughter almost daily for twelve years should have his civil status restored. This is an unusual provision in Icelandic law that allows convicted criminals to have their records wiped so that they can return to a very small society. The cases are reviewed by the Ministry of the Interior, and incredibly previous 'restorations of honour' have included convicted murderers and paedophiles.

The application received huge amounts of attention in the media but the Ministry of Justice refused to disclose the names of the backers, despite being legally obliged to do so. PM Bjarni was informed that his father was involved in the case by the Minister of Justice, Sigríður Andersen, several months earlier, but continued to refuse to disclose the names until he was forced to do so by a Parliamentary committee.

At that point his coalition partners, Bright Future, pulled out of the government claiming that it was clear the Independence Party was not sharing information with the entire government.

Unfortunately this tight link of friends and family is a recurrent feature in Iceland - the same mix was central to bringing down the banks ten years ago.