In the dock

About four years ago, Geir Haarde's world was looking just fine. As prime minister, he was popular with the electorate and the people of Iceland were confident about the future.

But then, the North Atlantic island nation got caught up in the maelstrom of the international financial crisis, following the collapse of the US bank, Lehman Brothers.

In the fall of 2008, Iceland's most important banks went belly up, and many of the country's 320,000 inhabitants lost their savings.

The wrath that followed was aimed primarily at Haarde, who was accused of gross misconduct in coping with the crisis. Virtually overnight, the economist Haarde found himself surrounded by the ruins of his political career. After weeks of demonstrations, he finally resigned as prime minister in January 2009.

'Made a scapegoat'

For the 60-year-old former chief of Iceland's conservative Independence Party, the situation could still get worse. After parliament decided by 33 votes to 30 in September 2010 to charge Haarde, his trial opened on March 5 of this year at the Landsdomur court in Reykjavik, a special tribunal established in 1905 to handle cases involving members of the Cabinet suspected of criminal behavior.

If found guilty, Haarde could face either a fine, or up to two years in prison. The trial came to a close on Thursday, but it is still open when the verdict will be handed down. Many observers question whether the charges are even legally justified.

Christian Rebhan, an Iceland expert with the Research Group on Northern European Politics at Berlin's Humboldt University, has his doubts.

"There is a lot of room for interpretation within the constitutional and legal framework. It was really a political decision and not a legal one," says Rebhan.

Haarde has denied the allegations with the argument that no one at the time could have foreseen the dimensions of the crisis. He claims that he is being used as a "scapegoat."

"Because the trial has been exploited for party politics, it has been easy for Haarde to portray himself as a scapegoat," Rebhan told DW.

Political horse-trading

Looking at the domestic political situation before the trial, Rebhan points out that, early on, three other government ministers were also in the sights of the commission charged with investigating the bank collapse. After a parliamentary vote, they were absolved of responsibility. This is why Haarde accuses the left-wing parliamentary majority of staging a political spectacle. In his view, the responsible Social Democrat minister, who belonged to his coalition at the time, must also be charged.

What is clear, however, is that during Haarde's term, a fatal mixture of legal loopholes, sloppy government oversight and a questionable mix of business and politics turned Iceland into a playground for financial gamblers.

Whatever the role the former prime minister may, or may not, have played, the trial has already made history. Haarde is not only the first political leader anywhere in the world to answer in court for the financial crisis; his case is also the first ever to come before Iceland's special Landsdomur court. Iceland is one of the very few countries in which politicians can be charged for neglect of duty.

Majority opposes the trial

For Geir Haarde, there will be no more elections, no more political career - just a verdict from the special court. But time could be on his side.

With Iceland on the road to financial recovery - thanks to billions in loans from Scandinavian countries and the International Monetary Fund - the anger against Haarde has subsided. In the most recent opinion poll conducted earlier this year, a majority of Icelanders said they opposed the trial. Perhaps that will make the judges of the Landsdomur more merciful.

Author: Ralf Bosen / gb
Editor: Joanna Impey