It is fitting, and yet unfortunate, that only one former head of state is having to stand trial in a special court of impeachment for his financial misdemeanours and horrors. The former Icelandic Prime Minister Geir Haarde faces charges of gross negligence in failing to take appropriate measures to avert the financial disaster that befell the country in 2008, including interventions to curb a galloping banking sector.
The economic crisis that was precipitated that year was something of a revelation for the Icelandic public. The country neared bankruptcy, and applied for assistance from the International Monetary Fund. Its three major banks were put into receivership. The stock exchange shed 90 percent of its value. Government’s role was forfeited. Theirs ceased being protecting the public – it was rather a case of colluding with an imploding financial sector, a case of throwing the public into the economic ring of gladiatorial combat. The disaster also involved foreign governments – the Netherlands and Britain had to carry the can for hundreds of thousands of their citizens who had placed money in the Icelandic banking system.
There are broader questions of debate crop up regarding Haarde’s trial. To single out one person as the demonic embodiment, the one true fiend of what became a global crisis, is a false solution. Thousands were involved, and each with varying degrees of culpability. ‘In a nutshell’ writes Bendikt Johannesson of the Iceland Review (Mar 11), ‘a majority of Althingi, Iceland’s Parliament, voted to charge a political opponent for not preventing a world economic crisis.’
Nicolas Vernon of Brueghel, a think-tank based in Brussels, feels that judicial interventions should have little role to play in dealing with a ‘bad policy decision’. It has, after all, been admitted that this is a ‘political trial’ (Iceland Review Online, Mar 10). For Vernon, the only true punishment is through the ballot, a resounding dismissal of governments who err in their judgments. Such arguments, however, only go so far. The judicial forum is often an appropriate one to emphasise accountability. The question to be asked though is what Haarde can be accountable for.
Furthermore, how does one try a lemming intent on committing suicide? Ideology is a way of deflecting reality, and for so long that ideology has placed its bets on the iniquitous fantasy of the free market. One good example of this was Iceland’s former central bank chief David Oddsson, a true devotee of deregulation, and a key figure behind implementing policies that led to a staggering growth in the banking sector – some bloating to 10 times the size of the economy. A closer inspection of Haarde’s record certainly shows that he was no more culpable that his colleagues, perhaps even less so.
At the trial, Oddsson, who should count himself as lucky not to have made a speedy entry into the dock himself, claimed that he was the prophet of warning, an oracle who could see the devilish machinations of the marketplace unfolding. He ‘warned the government, in the strongest possible terms, that the Icelandic banks were facing serious difficulties re-capitalising themselves as the European banks no longer believed in their stability’ (Reuters, Mar 6). Haarde, it seems, can’t count on his friendship with Oddsson to save him.
The cultural dimensions of a state and its citizens towards money is also a case in point, making prosecutions, should they ever happen in such cases as Greece, unviable. To however assume that no action should be taken against heads of state who bring their state to bankruptcy would be a concession to atrocious decisions.
What many of Iceland’s citizens want is an admission more than a conviction, an extracted public confession. Silla Sigurgeirsdottir of the University of Iceland is of such an opinion. ‘The most important thing is not that he is convicted. The most important thing is that somebody says I’m sorry, I made a mistake, I neglected my duty’ (The National, Mar 11).
Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne. Email: email@example.com