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Geir Haarde, ex-Iceland PM, on trial over financial crisis

The trial of former Icelandic premier Geir Haarde, charged with negligence over his handling of the 2008 financial crisis, has begun in Reykjavik.

Geir haarde iceland 2012 03 05Enlarge
Geir Haarde is being tried by the Landsdómur court, a body established at the beginning of the 20th century to try cabinet ministers which is being convened for the first time in history. (AFP/AFP/Getty Images)

LONDON – The trial of former Iceland Prime Minister Geir Haarde, charged with negligence over his handling of the 2008 financial crisis, has begun in Reykjavik.

Haarde, 60, is thought to be the world’s first politician to face criminal charges over the crisis, and faces up to two years in prison if found guilty, according to The Financial Times.

Iceland fell into deep recession after its three banks collapsed in autumn 2008 during economic turmoil, leading to soaring inflation, spiralling unemployment and a plummeting króna.

Haarde, who led the Independence Party government at the time, is accused of negligence over his failure to ensure financial safeguards were in place.

The former leader says he was only doing what was best for Iceland at the time, dismissing the charges as “political persecution” and telling the court as he took the stand on Monday: “I reject all accusations, and believe there is no basis for them.”

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Haarde is being tried by the Landsdómur court, a body established at the beginning of the 20th century to try cabinet ministers which is being convened for the first time in history.

Legal experts say Haarde has a strong chance of being vindicated at the trial due to the strength of his legal team and increasing unease at the idea of a single politician shouldering the blame for Iceland’s crash, which some say was inevitable given the broader global economic crisis, according to Sky News.

In the immediate aftermath of the crisis, many sought to affix blame for the chaos sweeping the 330,000 strong country. Haarde was forced out of office in 2009 by a wave of public protests, the Associated Press reports.

The failure of online bank Icesave triggered an as yet unresolved dispute between Iceland and the UK, with then-UK Prime Minister Gordon Brown accusing Haarde of “unacceptable” and “illegal” behaviour after Iceland failed to guarantee compensation for Icesave’s UK customers, according to the BBC.

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http://www.globalpost.com/dispatch/news/business-tech/global-economy/120305/geir-haarde-ex-iceland-pm-trial-over-financial-crisis