The trial of former Prime Minister Geir H. Haarde has officially begun, and has already been receiving international attention.
Parliament voted last year to charge Geir with negligence and mismanagement in the time leading up to the economic collapse of 2008. An investigation conducted by the Special Investigation Commission (SIC) came to the conclusion that Geir was at least partially at fault, depicting Geir in its report as both hopelessly out of the loop when it came to financial matters, and terrified of then Central Bank chairman Davíð Oddsson, who was at one time the chairman of Geir’s political party, the Independence Party.
Just months after parliament narrowly voted to press charges against Geir, a conservative-led proposal called for the trial to be dropped. However, this proposal was defeated, and the trial was scheduled to proceed as planned.
Yesterday marked the first day of the trial, with most of the questions pertaining to Icesave and the size of Iceland’s banks. When specifically questioned about Icesave, Geir said that the Financial Supervisory Authority (FME) was taking care of the matter at the time, and the subject of Icesave was seldom raised to him. He said he was never asked to step in and do anything about Icesave. Whatever his level of participation, he said his involvement in whether or not Icesave should be a subsidiary in Britain would not have made any difference.
The size of the banks before the collapse was also raised. Among the charges against Geir is that his government did nothing to try to reduce the size of the banks, or to get them to move their headquarters overseas – both of which might have prevented a total collapse. However, Geir maintained – as he has since charges were first levied against him – that his government could not have foreseen the 2008 economic collapse, nor did it have any idea that the banks’ assets were so over-leveraged. “Nobody predicted that there would be a financial collapse in Iceland” in 2008, he said.
The trial continues today. Robert Spano, law professor at the University of Iceland, told The Financial Times, “This is a seminal event in Icelandic history and will be a test for our judicial system.”