Ex-PM on trial for Iceland bank fall says he saved economy
(REYKJAVIK) - Iceland's former prime minister Geir Haarde, facing trial over the country's 2008 financial meltdown, describes the case as a farce, insisting he actually helped rescue the economy from a fate similar to that of Greece.
"We saved the country from going bankrupt," Haarde, 68, told AFP in an interview this week, claiming that if he and his government had acted differently when all the major banks failed in October 2008, the economy could have fallen off a cliff.
"That is evident if you look at our situation now and you compare it to Ireland or not to mention Greece," he said, adding that the two debt-wracked EU countries "made mistakes that we did not make ... We did not guarantee the external debts of the banking system."
When Iceland's bloated financial sector imploded, its three largest banks alone held assets equal to 923 percent of gross domestic product.
"We had to let them go. They went bankrupt. And it turns out now that this was the right thing to do," Haarde said, pointing out that "there was a banking collapse but the real economy, all the productive capacity in the country, was kept intact and is still running."
The bank failure plunged Iceland into a deep recession and sent the value of its krona spiraling but it has gradually returned to growth and observers say it may not need to draw down the last installments of an IMF bailout.
Not everyone, however, thinks congratulations are in order.
Haarde, who as the head of the right-leaning Independence Party held the reins of government from mid-2006 to early 2009, is the only politician in Iceland facing trial over their conduct in the run-up to the financial crisis.
If found guilty, he could face up to two years in prison and large fines.
A report published last year on the cause of the banking collapse accused Haarde and three other former government ministers, along with a long line of bankers and financial industry insiders, of different degrees of negligence.
But when the new left-leaning parliament was asked last September to determine if any of the politicians should be taken before the Landsdomur, a never-before used special court for cabinet ministers, it only narrowly authorised putting the former government chief on trial.
"You ask me what's it like to be alone in this?" Haarde asks from his seat in the lobby of a downtown Reykjavik hotel, not far from the Culture House, where the special trial is set to resume on September 5.
"I'm so happy to be alone! I'm so happy that my colleagues are not being dragged into this situation," he said, insisting the trial is "a political farce motivated by some old political enemies who are cloaking this farce under the cover of a criminal trial."
Among Haarde's most outspoken accusers is Finance Minister Steingrimur Sigfusson, who heads government junior partner the Left Green Party.
He told AFP he felt it was unfortunate that parliament failed to indict other former government ministers but emphasised the commission report finding that Haarde had shown negligence.
"I don't think anyone is saying the crisis could have been completely avoided but couldn't you at least have done something to minimise the damage?" he asked, insisting "this is not political or personal."
"When it became clear we were heading towards catastrophe ... the record shows very little was done to avoid it," Sigfusson said, adding that the question of whether the former prime minister can be held criminally responsible will need to be determined by the court.
Haarde's defence has meanwhile seen two requests for dismissal, on technical grounds, rejected by the court, but he hopes it will find in favour of a third request based on what he considers the demerits of the case.
"If you look at the (charge) document, it's a page and a half, and it's void of any supporting evidence," he said, peering over the frames of his signature steel-rimmed glasses.
While the charge sheet states he did not act appropriately to save the banks, "it does not say what I was supposed to do, or what the effects of that would have been," Haarde said.
"There was a banking collapse all over the world ... Why isn't any other political leader before a similar court?" he asked.
"The answer is that nobody has ever thought about such a thing because the banking crisis was not the fault of individual political leaders."
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