Iceland government falls

[Jan Klimkowski]

Belated but welcome:

Former Iceland PM faces trial over bank collapse

Icelandic lawmakers have concluded the country's former prime minister ought to be tried for "economic negligence" over the catastrophic failure of its banking system and currency.

September 12, 2010

A special investigation committee, known popularly as the Truth Commission, recommended that Geir Haarde, the former prime minister, stand trial, along with Björgvin Sigurdsson, the former minister of commerce, and Árni Mathiesen, the former minister of finance.

It found during an 18-month inquiry that the three men showed recklessness in their handling of Iceland's financial crisis, which brought down its three banks and crippled the currency in October 2008.

The crisis also sparked a diplomatic row with Britain over the £2.3 billion bill for the failure of Icesave, an internet bank based in Reykjavik that offered high-interest rate accounts to UK savers.

Iceland's taxpayers must now foot the £2.3 billion bill for the first £22,000 in compensation to each British saver, as well as dealing with unprecedented economic austerity and 20pc lower salaries. The crash also left British councils, hospitals and universities £1 billion out of pocket.

Iceland's investigation committee proposed that the Nordic nation's parliament set up a special court, called the Landsdómur, to try the politicians under laws covering ministers' accountability.

Its report says that Mr Haarde and his colleagues ought to have realised the extremely serious nature of Iceland's financial problems more than six months before the crash – but claims they failed to act.

The committee concluded that officials "lacked both the power and the courage to set reasonable limits to the financial system".

Investigators said the billionaire owners of Iceland's banks – Kaupthing, Glitnir and Landsbanki – had an overly cosy relationship with political leaders, meaning the authorities failed to rein them in.

The recommendation to try the former ministers was supported by a five out of the nine lawmakers sitting on the commission, with opinions split down party lines.

Four right-leaning Independence Party politicians refused to back the recommendation that would see their former leader forced to defend his actions in court. Mr Haarde stepped down in spring 2009 amid mass protests about his role in the financial crisis.

Johanna Sigurdardottir, Iceland's left-leaning Prime Minister, called the report's conclusions "a serious accusation against our political system, our politicians, the parliament, stock market".

"It is a problem we must confront," she said, adding that the recommendation would have had more force if unanimous.

Iceland is still dependent on a $10 billion loan package led by the International Monetary Fund.

It wants to join the European Union, but the accession process has been held up by the row with Britain over its £2.3 billion Icesave debt.

http://www.telegraph.co.uk/news/worldnew...lapse.html

I see that Iceland is still suffering from Gordon Brown's unethical and bullying use of anti-terror legislation in the narrow British self-interest.