Ex-Iceland Premier in court over meltdown

After a heated debate, MPs voted 33-30 to refer charges to the court against Geir Haarde for allegedly failing to prevent Iceland’s 2008 financial crash – a crisis that sparked protests, toppled the government and brought the economy to a standstill by collapsing its currency.

Mr Haarde faces up to two years in jail if found guilty. The court, which could dismiss the charges, has never before convened in Iceland’s history. A hearing date has not yet been set.

The ex-leader of the Independence Party is no longer in parliament and stepped down from office last year following widespread protests and treatment for oesophageal cancer.

“I will answer all charges before the court and I will be vindicated.” Mr Haarde, 59, told Icelandic broadcaster RUV.

“I have a clean slate. This charge borders on political persecution.”

Iceland, the volcanic island with a population of just 320,000, went from economic wunderkind to fiscal basket case almost overnight when the credit crunch took hold.

After dizzying economic growth that saw banks and companies in this tiny Nordic nation snap up assets around the world for a decade, the global financial crisis wreaked political and economic havoc in Iceland. Its banks collapsed in October 2008.

Unemployment has soared since then and the country has lurched from crisis to crisis.

In April, an eruption at Iceland’s Eyjafjallajokull volcano triggered a giant ash cloud that disrupted global air travel for weeks and later restricted travel to and from the island nation.

In the same month, a report into the banking collapse accused Mr Haarde and the central bank chief of acting with “gross negligence” in allowing the financial sector to overheat without adequate oversight.

The 2,300-page government-commissioned report detailed a litany of mistakes made in the lead-up to the bank meltdown.