THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

Former leader of Iceland could face charges in financial crisis

ECONOMIC CRISIS Geir Haarde faces up to two years in jail if found guilty. The court has never before convened in Iceland’s history. ECONOMIC CRISIS
Geir Haarde faces up to two years in jail if found guilty. The court has never before convened in Iceland’s history.
By Gudjon Helgason and Paisley Dodds
Associated Press / September 29, 2010

E-mail this article

Invalid E-mail address
Invalid E-mail address

Sending your article

Your article has been sent.

Text size +

REYKJAVIK, Iceland — Geir Haarde, former prime minister, has been referred to a special court in a move that could make him the first world leader to be charged in connection with the global financial crisis.

After a heated debate yesterday, lawmakers voted 33 to 30 to refer charges to the court against Haarde for allegedly failing to prevent Iceland’s 2008 financial crash — a crisis that sparked protests, toppled the government, and brought the economy to a standstill by collapsing its currency.

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. A hearing date has not yet been set.

Haarde, former leader of the Independence Party, is no longer in Parliament and stepped down from office last year following widespread protests and treatment for esophageal cancer.

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

Iceland, a volcanic island with a population of 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 this 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, 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 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.

Pall Hreinsson, the supreme court judge appointed to head the Special Investigation Commission that issued the report, singled out seven former officials for particular criticism.