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Court to rule on ex PM's role in Iceland's 'meltdown'

The only politician in the world to stand trial for his role in the 2008 financial crisis will learn his fate today when a court in Iceland rules on whether the island's former prime minister was grossly negligent or not.

In a verdict that many fear will do little to heal the wounds of the meltdown, a court will decide whether former prime minister Geir Haarde (61) was personally responsible for failing to rein in the country's banking sector before it imploded.

Mr Haarde, who faces four charges of gross negligence, has denied any guilt.

There is growing anger on the North Atlantic island with many Icelanders wondering why none of the men in charge of the banks that collapsed have been tried -- even though a handful of charges have been brought and dozens of investigations are under way.

"Honestly, I hope they will sentence him to jail because we need it. He had warning signs years before it happened but he did absolutely nothing," Hordur Torfason, a 66-year-old activist who led a protest movement after the crisis, said.

The protests were among the biggest in Iceland's post-war history and involved mass meetings of people clashing pots and pans outside parliament.

"We are trying to get an explanation of what happened, what went wrong... if he is innocent, then it (the court) has been a show," added Torfason.

Many believe an innocent verdict is more likely, however, and that such a verdict would do little to appease a widespread feeling of anger after the crisis.

On the other hand, a guilty verdict, which could lead to up to two years in jail, could raise questions about how just one politician could be responsible for a crisis that was emblematic of the global credit crunch.

Denial

"This is not a reckoning for the whole collapse," said Egill Helgason, one of Iceland's best-known commentators. "The trial only showed they were in denial, and that they couldn't do anything. Nobody has really assumed responsibility."

Though the economy is recovering from the crisis and Iceland successfully completed a bailout programme led by the IMF, Mr Torfason said people remained distrustful of state institutions.

Polls show that parliament currently has the support of only 10pc of the public.

Iceland's biggest banks were all taken over by the state in late 2008 after the credit crunch sparked by the collapse of Lehman Brothers froze their access to funds.

Iceland ring-fenced the banks' domestic operations, letting their international operations go bankrupt.

Irish Independent