Iceland ex-PM mostly cleared

The prime minister who presided over the collapse of Iceland's banking system in 2008 was exonerated on all but one charge against him at a special, unprecedented trial on Monday.

"Geir Haarde will not be punished," Markus Sigurbjornsson, the head of the special court Landsdomur for current and ex-ministers, said when beginning to read out the verdict.

The never-before-used court found Haarde guilty only of the most minor charge against him, that he failed to arrange a timely meeting with his cabinet to insure "a comprehensive and professional analysis of the financial risk faced by the state because of the risk of financial crisis."

The court had already cleared Haarde, who had pleaded innocent on all counts, on the most serious charge of "gross negligence" last October. Having been established in 1905, the case against Haarde was the first in the Landsdomur court's history.

The former prime minister, in charge when the country's three biggest banks collapsed in a week early in the financial downturn that led to a severe recession in much of the world, smiled and shook hands with supporters after the trial - though he criticized the single guilty verdict.

"It is absurd," Haarde told reporters. "It is obvious that the majority of the judges have found themselves pressed to come up with a guilty verdict on one point, however minor, to save the neck of the parliamentarians who instigated this."

Iceland's banking sector ballooned to nine times the country's annual economic output during a decade of boom, only to crumble in October 2008, in the opening phases of a sharp global economic downturn.

msh/mz (AFP, AP, Reuters)