REYKJAVIK, Iceland – The man who led Iceland’s government when the nation’s banks collapsed will learn Monday whether he has been convicted of criminal responsibility for the crisis.
Geir Haarde, the only government leader to face trial because of the global financial crisis, has pleaded innocent to four charges alleging that his negligence in carrying out his duties contributed to the disaster. He could be sentenced to up to two years in prison if convicted.
The verdicts are to 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 tiny 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 Icelandic banks’ precarious finances until they collapsed.
“The bankers did not realize 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 their case hinges on a charge that Haarde failed to implement recommendations that a government committee had drawn up in 2006 to strengthen Iceland’s economy.
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 Icelanders who lost their jobs and homes in the crash.
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 United States and Europe.