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Iceland's former prime minister goes on trial

Iceland's former Prime Minister Geir Haarde speaks to the press on September 5, 2011 at the Icelandic Culture House in Reykjavik during his trial for allegedly contributing to the country's stunning economic collapse.

Bob Moon: One of the first places to be hit hard by the 2008 financial crisis was Iceland. The country's three main banks collapsed, ushering in hard times for the island nation, and sending monetary shockwaves across Europe. Today, one man goes on trial for it all: the country's former prime minister. He denies responsibility.

On the line from Reykavik is Icelandic TV journalist Egill Helgason. Thanks for joining us.

Egill Helgason: I’m happy to be with you.

Moon: What exactly is the former prime minister accused of?

Helgason: Well he’s basically accused of negligence. That the banking system and the financial system outgrew the economy of the island by, well, 10 times and then it collapsed and that he could have done things to prevent this. And there’s also a question of some savings accounts that Icelandic banks had in the U.K. and Holland which have been very problematic for our recovery and for our economy. They could have averted that disaster. But it’s basically a question of negligence.

Moon: And I would imagine those other countries have been brought to bear a lot of political pressure.

Helgason: Well, not on this trial, this trial is a very internal matter. It stems from an investigative report written by a committee for the parliament, so this is a unique event that he has been testifying, the former prime minister, this morning.

Moon: It’s unusual there, it’s unusual everywhere. He seems to be one of the only political figures in the world actually being charged with a crime for the financial crisis. Can you really blame Iceland’s financial predicament on one man?

Helgason: That is the problem. This is becoming a matter of political division. So, one has to say that this is a bit of a failure. When this was voted for in the parliament, it was very narrow. So this trial is going on and it’s not really enjoying the total support of the population and not thee total support of the parliament so it has become very politicized.

Moon: Egill Helgason, thank you very much for joining us this morning.

Helgason: My pleasure.

About the author

Bob Moon is Marketplace’s senior business correspondent, based in Los Angeles.

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