Today the trial of Geir Haarde, the ex-Prime Minister of Iceland, begins. Haarde was Prime Minister of Iceland during the financial crisis of 2008 that crippled three of Iceland’s largest banks. The Icelandic collapse soured relations with the UK, the largest financial center in Europe after the Icelandic government was unable to guarantee the deposits of British customers of Icesave, an online bank that collapsed during the crisis. Haarde is the first political leader to face criminal charges over his role in the financial crisis of 2008. The specific charges against Haarde are a worrying precedent, and the trial itself is little more than a politically advantageous witch-hunt.
That many people, not just in Iceland but around the world, are angry over the role of their leaders during the 2008 financial crisis is easy to understand. From all wings of the political spectrum, from the Occupy movement to Ron Paul’s campaign, there has been concentrated anger at the stupidity and irresponsibility of crony capitalism. While there is a lot of anger to go around the fact remains that very few people involved in the financial crisis were actually breaking the law. The charges leveled at Haarde illustrate the desperation that possesses those who want a scapegoat.
Haarde is charged with being negligent, charges that he has rejected. According to prosecutors, Haarde failed to implement the recommendations of a committee that would have strengthened Iceland’s economy. Haarde says even were the recommendations implemented Iceland could not have been saved from the 2008 crisis. While it might well be true that Haarde was negligent, perhaps even incompetent, he should not be facing criminal charges. Prosecuting someone for negligence after the fact is dangerous. It would be absurd to argue that Roosevelt should have been charged with negligence after the attack on Pearl Harbor, or that Chamberlain should have been charged with negligence after Munich. Hindsight is a luxury that we cannot afford in a criminal court.
We will not know the outcome of this case, being held at a special “Landsomur” (High Court) court, for some weeks. Haarde’s political opposition will not doubt capitalize on the trail throughout its duration. What is most unfortunate about Haarde’s trial is that it is distracting from what should be the focus of the Icelandic government, which is the rebuilding of a safe and secure financial sector. The financial crisis of 2008 was too severe for petty, politically motivated, and ineffective witch-hunting. I hope that Haarde’s trial is the first and last of its kind we will see.