Ex-Iceland PM referred to court over financial crisis

The 59-year-old faces up to two years in prison if convicted by the special court

Iceland's parliament has narrowly voted to refer former Prime Minister Geir Haarde to a special court over his role in the country's financial crisis.

The Landsdomur will now decide whether he should face trial for negligence.

A recent report commissioned by the parliament found that more should have been done to limit the damage from the collapse of Iceland's banks in 2008.

Mr Haarde, who stepped down last year following widespread protests, said he would be "vindicated" by the court.

"I have a clean slate. This charge borders on political persecution," he told the Icelandic National Broadcasting Service (RUV).

He also noted that two current ministers - Prime Minister Johanna Sigurdardottir and Foreign Minister Ossur Skarphedinsson - were not referred to the court, and nor were his former foreign, finance and business ministers.

The 59-year-old faces up to two years in prison if convicted by the Landsdomur, a special chamber which has never convened since it was set up in 1905 to try government ministers accused of crimes.

Iceland's economic difficulties became evident in the autumn of 2008 as conditions tightened in the global credit market.

Icelandic banks owed around six times the island's total gross domestic product (GDP) and when the world's credit markets dried up, they were left unable to refinance loans.

The government took over control of all three of the country's major banks in an effort to stabilise the financial system, and was later forced to apply to the International Monetary Fund for emergency financial aid.

In April, a Special Investigation Commission report accused Mr Haarde and the central bank chief of acting with "gross negligence" by not exerting enough pressure on the banks to shrink their balance sheets.

"My official acts as prime minister didn't cause the banking collapse; it wasn't in my power, or in the power of other ministers, to prevent it," Mr Haarde said in a statement earlier this month that also blamed the banks for misleading his government.