|Geir Haarde, who faces four charges of gross negligence, has denied any guilt [File: EPA]|
The only politician in the world to stand trial for their role in the 2008 financial crisis will learn his fate when a court in Iceland rules on whether the island’s former prime minister was grossly negligent or not in his handling of the crisis.
Geir Haarde, 61, has pleaded innocent to four charges alleging that his negligence in carrying out his duties contributed to the economic disaster on the North Atlantic island. He could be sentenced to up to two years in prison if convicted.
“Honestly, I hope they will sentence him to jail because we need it“
– Hordur Torfason, activist
The verdict on Monday will be announced by 15 members of the Landsdomur, a special court founded in 1905 to deal with criminal charges against Icelandic government ministers. This is the first case to be tried by the court.
Iceland’s banking sector ballooned to nine times the nation’s annual gross domestic product in a decade of boom, before collapsing under the weight of its debts in October 2008. The country’s three main banks collapsed in a single week.
Testifying on March 5, Haarde said neither he nor financial regulators knew the real state of the banks’ precarious finances until they collapsed.
“The bankers did not realise that the situation was as dire as it was,” Haarde said. “It was not until after the crash that everyone saw it coming.”
The office of Prime Minister Johanna Sigurdardottir confirmed on Friday that the verdicts would be announced on Monday.
The special court includes five supreme court justices, a district court president, a constitutional law professor and eight people chosen by parliament.
“I reject all accusations and believe there is no basis for them,” Haarde testified.
Part of the case relies on a charge that Haarde failed to implement recommendations that a government committee had drawn up in 2006 to strengthen Iceland’s economy.
|The court will decide if Haarde was responsible for failing to rein in banking sector before it imploded|
Haarde said the committee’s work could not have prevented the crash.
Haarde, the former leader of the Independence Party, became a hated symbol of the bubble economy for many Icelanders who lost their jobs and homes in the crash.
There is growing anger on the island, with many people 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,” Hordur Torfason, a 66-year-old activist who led a protest movement after the crisis, told the Reuters news agency.
“He had warning signs years before it happened but he did absolutely nothing.”
Haarde told the court the banks’ size would not have been a problem if not for their recklessness and a worldwide squeeze on credit, which also brought down major banks in the US and Europe.