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Europe

Iceland court charges ex-PM for 2008 financial meltdown

Text by News Wires

Latest update : 2012-04-23

An Icelandic court on Monday ruled that former Prime Minister Geir Haarde was guilty on one charge related to the nation's 2008 financial collapse, but no punishment was handed down. He is the only world leader to be tried over the financial crisis.

REUTERS - An Icelandic court found a former prime minister g uilty on Monday of one charge related to t he collapse of the country’s banks in 2 008 b ut exonerated hi m on three other charges and decided not to punish him.

F ormer prime minister Geir Haarde, 61, was the only leader in the world to face prosecution over the global financial cr isis.

A special court found Haarde guilty of failing to hold dedicated cabinet meetings ahead of the crisis, which was one of four charges against him, but exonerated him on three other charges. The special court of impeachment was set up in 1905 but the Haarde case was its first trial.

“It is absurd,” Haarde told reporters after the verdict.

“It is obvious that the majority of the judges have found themselves pressed to come up with a guilty verdict on one point, however minor, to save the neck of the parliamentarians who instigated this,” he added.

There has been anger on the North Atlantic island as many wonder 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 underway.

Icelanders took to the streets during the crisis, clashing pots and pans outside parliament in downtown Reykjavik.

The protests sometimes turned violent in a country renowned for its peaceful nature.

The verdict , broadcast live on TV, may not heal wounds and may l ead to questions o ver who should take responsibility for a crisis that was emblematic of the global credit crunch.

Lost confidence

Though the economy is recovering from the crisis and Iceland successfully completed a bailout programme led by the International Monetary Fund, people remain distrustful of state institutions.

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

Some economists have praised Iceland for letting the banks go under, though it remains in a dispute with Britain and the Netherlands over refunds for depositors in Landsbanki, an Icelandic bank that used to operate in those countries.

Capital controls are still in place, damaging the country’s economic recovery and analysts say the Icelandic people are more divided than ever before.

Date created : 2012-04-23

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