Former Iceland PM Geir Haarde due in court

Former Icelandic Prime Minister Geir Haarde is due in a special court on charges of "failures of ministerial responsibility" in his handling of the 2008 financial crisis.



The country's three main banks collapsed amid economic turmoil.



The failure of Icebank, which hit thousands of savers in the UK and Netherlands, led to a dispute over compensation, which remains unresolved.



Mr Haarde has called the case a "farce" and wants the court to throw it out.



The Landsdomur court, a special body to try cabinet ministers, has never before heard a case.



Public opinion is divided, with some people seeing the trial of Mr Haarde as scapegoating, and others arguing that public accountability is essential following the country's financial collapse.

'Right thing to do'



Iceland was plunged into a deep recession following the collapse of its three leading banks, including Icesave's parent company Landsbanki, in autumn 2008.



Mr Haarde, 60, led the Independence Party government at the time.



He says that the case against him is a political vendetta by the current coalition.



Mr Haarde wants the Landsdomur court should throw out the charges, which carry a maximum penalty of two years in prison.



His lawyers will argue the charges are too vague to meet legal standards and have not been properly investigated.



"When it became clear we were heading towards catastrophe... the record shows very little was done to avoid it," current Finance Minister Steingrimur Sigfusson told the AFP news agency.



But Mr Haarde argues that his government avoided the mistakes made by Greece and Ireland, when he allowed failing banks to go under.



"We had to let them go. They went bankrupt. And it turns out now that this was the right thing to do," said Mr Haarde.

'Worst option'



Icelandic voters have twice rejected deals to repay the estimated 4bn euros (£3.6bn; $5.6bn) the UK and Dutch governments spent reimbursing citizens who lost money in the collapse of Icesave.



Prime Minister Johanna Sigurdardottir said that "the worst option had been chosen" after voters said no in a second referendum in April this year. The issue remains unresolved.



When Icesave collapsed, the then UK Prime Minster Gordon Brown accused his Icelandic counterpart of "unacceptable" and "illegal" behaviour after Iceland said it could not give a guarantee to reimburse UK customers of the online bank.



In response, Mr Haarde accused the UK government of "bullying" and bringing down one of its other banks after the Treasury froze the assets of Icelandic institutions in the UK.