The global financial-economic crisis that began in 2008 hit Iceland especially hard.
In 2007, Iceland had the 7th highest average per capita income in the world ($54,858). The next year, everything fell apart. Iceland’s banking system crashed. The combined debt of the country’s three largest banks (Glitnir, Landsbanki and Kaupthing) exceeded Iceland’s GDP by SIX times!
In October 2008, the Icelandic parliament passed emergency legislation to take over, i.e., nationalize, the domestic operations of the three banks, but not their foreign debts or assets. On 26 January 2009, the coalition government collapsed due to the public dissent over the handling of the financial crisis. A new left-wing government was formed a week later and immediately set about removing Central Bank governor Davíð Oddsson and his aides from the bank through changes in law. In April 2010, the Icelandic Parliament‘s Special Investigation Commission published the findings of its investigation,revealing the extent of control fraud in the crisis.
Now, Iceland is putting the man who was prime minister when the economy crashed, on trial.
Former Prime Minister Geir Haarde (r)
BBC News reports March 5, 2012, that the trial of former Icelandic Prime Minister Geir Haarde, on charges of negligence over the 2008 financial crisis, has begun in Reykjavik. Haarde is the first world leader to face criminal charges over the crisis.
The proceedings are being held at the Landsdomur court in the first case for the Reykjavik-based tribunal.
The country’s three main banks collapsed in autumn 2008, plunging Iceland into a deep recession. Haarde, 60, led the Independence Party government at the time. He is accused of being negligent because he had not ensured financial safeguards were in place.
Haarde had sought to have all charges dismissed, calling the trial “preposterous” and saying that his conscience was clear. He has pleaded not guilty and rejects the charges as “political persecution,” insisting he will be vindicated during the trial. As he took the stand, he said he was only doing what he thought was best for the country at the time: “I reject all accusations, and believe there is no basis for the trial. [But the trial will be] the first time I get a chance to answer questions regarding this case.”
Some Icelanders see the trial of Mr Haarde as scapegoating, while others argue that public accountability is essential following the country’s financial collapse.
Good for Iceland!
Now why can’t we do that in the United States? — beginning with Bush’s Treasury Secretary Henry Paulson and Obama’s Treasury Secretary Timothy Geithner!