Saturday 23 September 2017

Former Iceland PM on trial for his role in banking crisis

Independent.ie reporters

Iceland's former prime minister Geir Haarde went on trial today over the country’s 2008 financial meltdown.

In a case that he describes as a "farce" and which his lawyers are seeking to have dismissed, he faces allegations that he failed to prevent the crash and subsequent crisis that sparked protests, toppled the government and brought the economy to a standstill by collapsing its currency.



Mr Haarde faces up to two years in jail if found guilty. The court, which could dismiss the charges, has never before convened in Iceland's history.



The ex-leader of the Independence Party is no longer in parliament and stepped down from office in 2009 following widespread protests and treatment for oesophageal cancer.



"I will answer all charges before the court and I will be vindicated." Mr Haarde, 59, told Icelandic broadcaster RUV. "I have a clean slate. This charge borders on political persecution."



Mr Haarde blames political opponents for the charges – the first against a world leader involved in the global crisis.



Current Finance Minister Steingrimur Sigfusson has been one of Mr Haarde's toughest opponents and has argued the case is important in principle.



"When it became clear we were heading towards catastrophe ... the record shows very little was done to avoid it," Mr Sigfusson said in July, explaining why he felt the trial was needed.



Mr Haarde, in a recent interview, called the trial "a political farce motivated by some old political enemies who are cloaking this farce under the cover of a criminal trial.



"We saved the country from going bankrupt," he insisted, claiming that if he and his government had acted differently when the banks failed in October 2008, the economy could have fallen off a cliff.



"That is evident if you look at our situation now and you compare it to Ireland or not to mention Greece," he said, adding that the two countries "made mistakes that we did not make ... We did not guarantee the external debts of the banking system."

Iceland, the volcanic island with a population of just 320,000, went from economic wunderkind to fiscal basket case almost overnight when the credit crunch took hold.

After dizzying economic growth that saw banks and companies in the tiny Nordic nation snap up assets around the world for a decade, the global financial crisis wreaked political and economic havoc in Iceland. Its banks collapsed in October 2008.



Unemployment has soared since then and the country has lurched from crisis to crisis.



In April 2010, an eruption at Iceland's Eyjafjallajokull volcano triggered a giant ash cloud that disrupted global air travel for weeks and later restricted travel to and from the island nation.



In the same month, a report into the banking collapse accused Mr Haarde and the central bank chief of acting with "gross negligence" in allowing the financial sector to overheat without adequate oversight. The 2,300-page government-commissioned report detailed a litany of mistakes made in the lead-up to the bank meltdown.

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