29 Sep 2010

Iceland’s ex PM faces negligence charges

Iceland’s former Prime Minister has become the first politician to face charges over the financial crisis, after the Icelandic parliament voted to bring negligence charges against him.

Iceland's former Prime Minister Geir Haarde faces negligence charges

Mr Haarde faces charges relating to his role leading up to the collapse of Iceland’s banking sector in 2008, leading to economic meltdown for the country.

He was Iceland’s Prime Minister from 2006 to 2009, before his coalition government crumbled in the face of protests over the collapse.

He will now face charges at a sitting of the Landsdomur, a special chamber set up in 1905 to try government ministers accused of crimes.

The parliament voted not to press charges against the former Foreign and Finance Ministers, Ingibjorg Solrun Gisladottir and Arni Mathiesen, as well as former Business Minister Bjorgvin Sigurdsson.

Parliament will now appoint a special prosecutor to bring the charges against Mr Haarde before the court.

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Mr Haarde, who apologised for the banking collapse in 2009, was the first political leader to lose power as a direct consequence of the economic crisis.

He told Icelandic broadcaster IFS that parliament’s decision today was “difficult and hard to bear”.

The vote to press charges against Mr Haarde was close: 33 members voted to proceed, and 30 voted against.

His premiership oversaw the aggressive expansion of Iceland’s main banks – Kaupthing, Glitnir and Landsbanki – and the incredible growth in its economy. At one point the banks’ combined assets were 10 times greater than Iceland’s gross domestic product.

However – perhaps inevitably – he also oversaw the banks collapse under a mountain of debt, sending Iceland’s economy into a deep recession, where it remains.

Many Icelanders blame him for not averting financial meltdown.

His coalition government, comprising the Independence Party and the Social Democrats, fell in 2009 and lost power in snap elections.