After the Haarde trial: a farce – or, actually, a trial?
There has widespread dismay in Iceland at the trial over ex-PM Geir Haarde – but not everyone is dismayed for the same reasons. Some are irritated that politicians and civil servants generally claimed nothing could have been done to prevent the collapse of the banks and that bankers can’t see they have done anything wrong. Others are upset that only one politician is on trial – there should have been more… or none.
When asked why Kaupthing had failed, the bank’s former CEO Hreidar Mar Sigurdsson said straightforwardly it had failed because of the Emergency Bill – the legislation passed on Monday Oct. 6 2008 to prevent a total chaos in Iceland as the banks were collapsing. Sigurdsson’s view is, to say the very least, quite narrow. On Friday Oct. 3 the Bank of England had already taken action against Kaupthing by taking over all new deposits to Kaupthing. Sigurdsson didn’t mention this action, which marked the beginning of actions against Kaupthing in the UK.
It needn’t come as any surprise that no one accepts any responsibility – that was already clear from the SIC report, ia based on extensive interviews with many of those involved. This tone of “it wasn’t me” or “nothing could be done” is abundantly clear from the quotes in the report.
It’s unlikely that any of the witnesses took much joy in bearing witness. Many of them will still feel uneasy about the past – and their future. Several of the witnesses at the Haarde trial have already been indicted by the Office of the Special Prosecutor – Sigurdsson is one of them – and/or are being sued by the Winding-up Boards of the banks and others might face lawsuits and charges. Everything they say will be coloured by their situation. Many of them have most likely rehearsed their answers with their lawyers.
Complaints that the trial is a farce seem to rest on a wholly unrealistic understanding of the nature of the trial. The trial is held because Haarde is accused of failures in office. The charges are built on a documentation of alleged failures. The trial is an act where the prosecutor seeks to clarify the documents and Haarde’s defence lawyer seeks to defend his client. The High Court Judges will come to their conclusion in 4-5 weeks.
Follow me on Twitter for running updates.
Sigrún,
Icelanders, as a whole, which means not all but a majority, went a bit stupid after their economy was collapsed. This is not unusual. They reacted to the setback with anger and adrenalin. This is normal in such situations. They began attacking each other. This is stupid in an emergency situation, but is, unfortunately, not uncommon. We think of Iceland as a nation of sailors, which it, now obviously, is not. Sailors know in emergencies to not throw over self-control and make matters worse. Icelanders did not, and today still, do not. Icelanders are, today, still, as Icelanders say, “pissing in their boot”. What they are doing to themselves is showing today in results: The ESA legal attack, the effect on the ISK of the message sent to potential investors, foreign and domestic, by the “Baldur Gudlaugsson should have sacrificed himself (or his investment)” verdict. It is good for Iceland that it is rich enough in resources to afford to be stupid for so long, and again and again, to cut off its own nose to spite itself, to use another expression. It is such a ‘cushion’ that makes it possible to be stupidly complacent. As sailors know, for having only a hull between themselves and the sea, when one does not have room for error one has to think, or sink.
The Haarde trial was not simply a farce, it was a political farce, and a pollitical witch-hunt, and an epitomé of stupidity, a political show-trial without scene or scenery or political script. You are right in your last paragraph, second sentence, that Haarde was accused of failures in office. But what were the failures? The prosecutors case was that he was there when the economy collapsed, and that the banks were involved in the business, because the economy collapsed when they collapsed. She failed to allege that Haarde did something. It is not a crime to be helpless. It is not a crime to do nothing, or do the wrong thing, in panic, or in confusion. The prosecutor did not accuse anything. Asserting that it is apparent, in retrospect, that better could have been done is a fatuous allegation. A trial unertaken to proof that kind of an allegation is a farce.
What the bankers did, or were doing, was irrelevant to what Haarde had to do in his office, and was doing. They could not be asked details of their activities in their testimonies, because they were not on trial, and they were not Haarde advisors or employees, or vise-versa. I agree with you that the Kaupþing demise began before the Alþingi Emergency Act. It began in British planning and decision before, and leading to the October 3 choking of KSF, not an Icelandic bank. That, too, is not relevant to Haarde’s situation. Haarde had to deal with what the situation was where he was, in Iceland.In Iceland the Emergency Act was correct, whatever the effect elsewhere: Sailors don’t refuse to flood a compartment to level a foundering ship because the water will ruin cargo. It may turn out after that the flooding was not after all necessary, but that is to be found out after, and if lubbers want to hold a trial and pooh-pooh the risk of the storm, let the lubbers be fools.
I was intrigued that in the trial nothing was made of the people of Iceland who, before the crash, were beneficiaries of the banks’ foreign success. After the crash they were victims, with everyone else, but before, they were not, and would have had to be sacrificed on speculation if Haarde had, for example, assumed dictator status and ordered the banks to shed obligation (call their loans in, doing to Icelandic borrowers what, at the end, was done to them. Would that have been a preferable solution?
Eventually Icelanders are going to have to wake up and start thinking, stop damaging their neighbors and start healing their rifts and working together. If they do not Iceland will end owned by Canadians and Chinese, and the Americans, like Goldman Sachs, who are the owners of Canadian holding companies, like Magma Energy. If that happens Iceland could, indeed, be like Tibet, and Ólafur could, indeed, be like the Dali Lahma…
R.L.Dogh
24 Mar 12 at 12:51 am