Iceland ex-PM's trial opens over banking crisis

REYKJAVIK - Agence France-Presse

In this Monday, Jan. 26, 2009 file photo Iceland's Prime Minister Geir Haarde addresses journalists at the parliament in Reykjavik, Iceland. AP photo

Iceland's ex-prime minister Geir Haarde went on trial Monday over his role in the 2008 banking sector collapse that brought his country to its knees, becoming the first political leader to be tried over the global financial crisis.

"I reject all accusations, and believe there is no basis for them," Haarde, 60, told the court as he took the stand.
 
He pointed out that "this is the first time I get a chance to answer questions regarding this case", adding: "I hail the fact that I get to answer questions in the case." Haarde, who headed the right-leaning Independence Party and held the reins of government from mid-2006 to early 2009 when his coalition was ousted amid public uproar over the crisis, has previously dismissed the case as a farce.
 
He is being tried by Landsdomur, a never-before used special court for current and ex-ministers.
 
He was one of four politicians blamed in a 2010 report for contributing to Iceland's stunning financial collapse, when all its major banks failed in a matter of weeks.
 
But parliament voted in September 2010 that he was the only one who should be tried on charges related to the collapse of the Icesave bank that spawned a fiery diplomatic row with Britain and the Netherlands.
 
In October, the court however threw out the most serious charge of "gross neglect".
 
Parliament has since the beginning of the year been debating whether to drop all charges and call off the trial against Haarde, but finally voted last week to allow the proceedings to go ahead.
 
The trial, which is set to last until March 15, is being held at the Icelandic Culture House in Reykjavik, chosen because it is large enough to house the proceedings and considered neutral ground.