The trial of former Icelandic Prime Minister Geir Haarde on charges of failing to prevent the country's 2008 financial crisis began at a special court in capital Reykjavik on Monday. Haarde thus becomes the world's first political leader to be tried in connection with the global financial meltdown.
Haarde is accused of "failures of ministerial responsibility" in his handling of the 2008 financial crisis during which three of the country's main banks collapsed. Haarde was at the helm of the Independence Party government at the time of the crisis.
The former PM is accused of failing to ensure financial safeguards were in place when the crisis hit. His trial is being heard by the Landsdomur court, a special body set up in 1905 to prosecute current or former cabinet ministers for any alleged wrongdoing while in office. His trial is expected to last until mid-March, with the court taking another four to six weeks to deliver its verdict.
During Monday's proceedings, Haarde pleaded not guilty to the charges, which he described as "political persecution." Expressing confidence that he would be cleared of the charges during the trial, Haarde insisted that he had responded to the crisis by doing what he believed was the best for the nation.
"I reject all accusations, and believe there is no basis for them," Haarde told the Landsdomur court on Monday. He said Monday's hearing was "the first time I get a chance to answer questions regarding this case." He also insisted that neither he or the country's financial regulators were aware of the precarious state of the banks until they collapsed in 2008.
Earlier, Haarde had unsuccessfully attempted to get the charges against him dismissed, describing them as "preposterous." Also, the Icelandic parliament had rejected an attempt made by the Independence Party last week to have the charges against Haarde dropped.
The collapse of Iceland's financial system in October 2008 had plunged the country into a recession and led to the collapse of three Icelandic banks. It also resulted in wide-spread public dissatisfaction and unrest over the rise in unemployment and acute cash shortage. The collapsed banks have since been taken over by the Icelandic government.
The three Icelandic banks that collapsed in 2008 were Landsbankiin, Glitnir and the Kaupthing Bank, which was Iceland's largest bank in the five years before it collapsed under a huge burden of debt at the beginning of the country's banking crisis.
Haarde, the former leader of the Independence Party, had stepped down from office in January 2009 to get treated for esophageal cancer, three months after the collapse of the country's banking system. He did not contest the 2009 elections and is no longer a member of parliament.
In September 2010, Iceland's parliament had voted to refer Haarde to the special court to decide whether he should face trial on charges of negligence over his role in the country's financial crisis. Nevertheless, the parliament, now controlled by center-left parties, dropped charges against three other members of Haarde's government in connection with the crisis.
That development came months after a report commissioned by Iceland's Parliament found that several senior members of the former ministry could have limited the damage by averting the collapse of the country's largest banks.
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