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Iceland could prosecute former cabinet over banking crisis

A special investigation into the collapse of the country’s biggest banks concludes: the government’s negligence was criminal.

Former PM Geir Haarde will find out tomorrow if he will face criminal charges over the Icelandic banking collapse.
Former PM Geir Haarde will find out tomorrow if he will face criminal charges over the Icelandic banking collapse.
Image: Brynjar Gauti/AP

A PARLIAMENTARY COMMISSION set up to examine the collapse of the Icelandic banking system in October 2008 has recommended that the country’s prime minister of the time, and three of his ministers, should face criminal charges for negligence.

The Special Investigation Commission (SIC) said that the former conservative government had shown “extreme negligence” in allowing financial conditions to lead the country’s three largest banks to collapse simultaneously, and that the former ministers should be “tried and punished by the Landsdomur”, a special court dealing with governmental failures which has never before been convened during Iceland’s independent history.

Specifically, the SIC named former prime minister Geir Haarde, former finance minister Arni M. Mathiessen, former commerce minister Bjoergvin G. Sigurdsson and former foreign minister Solrun Gisladottir to face trial.

The commission’s report confirmed the findings of its interim “Truth Report”, released in April. Of the nine parliamentarians sitting on the commission, five recommended that the politicians face prosecution while four opposed.

The parliament will now meet tomorrow to decide whether to appoint a prosecutor and judges for the Landsdomur – itself an usual event, given that the court-cum-tribunal has never sat in Iceland’s 105 years of self-rule.

Johanna Sugurdardottir, who replaced Haarde as prime minister, said the findings were “a serious accusation against our political system, our politicians, the parliament, stock market… it is a problem we must confront.”

She added that “it was unfortunate the commission wasn’t able to reach a unanimous decision, which would have given its recommendations more force.”

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Gavan Reilly

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