Icelandic lawmakers split on prosecuting former leaders for financial crash

Iceland MPs split over financial crisis charges

REYKJAVIK, Iceland — A committee of Icelandic lawmakers split Saturday over whether to recommend an unprecedented prosecution of former leaders for failing to prevent the country’s financial meltdown.

The deadlock means it will be harder for parliament to try former Prime Minister Geir Haarde and three other top officials for their role in the 2008 economic crash.

Iceland was one of the first victims of worldwide economic downturn sparked by the collapse of the American subprime mortgage market in 2007. Having grown frenetically over the previous years, Iceland’s debt-fueled financial system imploded under the weight of its obligations.

The North Atlantic nation’s currency has crumbled as inflation and joblessness soared.

A parliament-commissioned report published earlier this year put much of the blame for the catastrophe on Haarde and his government colleagues, saying that officials “lacked both the power and the courage to set reasonable limits to the financial system.”

But the decision on whether to charge them under Iceland’s law on ministerial responsibility has been left to parliament. The ministers would be tried by a specially convened constitutional court, and punishments could include fines or up to two years in prison.

A special cross-party committee was set up with the aim of recommending whether to level charges against Haarde — along with former commerce minister Bjorgvin Sigurdsson, former finance minister Arni Mathiesen, and former foreign minister Ingibjorg Gisladottir.

The committee split along partisan lines on Saturday, with five lawmakers from Iceland’s Left Green movement, the Progressive Party, and the Civil Movement opting to recommend charges against all four former officials. Two lawmakers from Social Democratic Alliance backed three of the charges but refused to endorse the prosecution of Sigurdsson — a fellow member of alliance.

The Independence Party, which Haarde once led, refused to endorse charges against any of the politicians.

Baldur Thorhallsson, a professor of political science at the University of Iceland, said a unanimous decision on the charges would have sent a “very powerful” message to parliamentarians.

A vote on the charges is expected within days, but with the committee split three ways along party lines, Thorhallsson said that parliament “will have a difficult time deciding what to do.”

Even if the ex-ministers were eventually prosecuted, further legal difficulties are expected. Thorhallsson said there was no appealing the constitutional court’s judgment, which might not meet European standards of justice.

“If they are charged, we are going to see a long debate ahead,” he said.

Associated Press Writer Raphael Satter in London contributed to this report.

Online:

Parliament-commissioned report on the 2008 financial crash: sic.althingi.is/