Fri 29th Oct 2010
The Icelandic economy collapsed in April 2008. It has been confirmed that the high court will try former Prime Minister Haarde, so he will have to answer for his alleged misconduct in the lead up to, during and following, the banking crisis, and be indicted for economic mismanagement during the financial crisis.
The crisis was due to political and financial decisions. Haarde, who was prime minister from 2006 until the beginning of 2009, must be held responsible for 'violations committed from February 2008 to the beginning of October 2008, by intent or gross neglect, mostly violations against the laws of ministerial responsibility' as well as breaches of the penal code, the committee of Icelandic lawmakers said.
The SVG 1979 Constitution was set up to safeguard the SVG economy and protect its people. It mandates for a Constitutional Director of Audit and a Public Accounts Committee (PAC) to regulate SVG's government financial activities - the public accounts.
The PAC is meant to report to Parliament in cases of excessive or unauthorised expenditure of public funds. However, during the ULP's time in office, 2001 to 2010, the PAC has not tabled reports in SVG parliament and failed to meet for 8 of those years. Eustace is chair of the PAC.
The former Iceland PM acted negligently in the years leading up to the meltdown. Has the same happened in SVG? Former Icelandic PM faces up to two years in jail if found guilty.
The Icelandic commission alleged that Haarde didn't exert enough pressure on the banks to shrink their balance sheets, after they amassed debts equivalent to 10 times Iceland's economic output, a development the commission said was key in fuelling the financial collapse.
Similarly in SVG, it must be seen that Eustace, leader of the opposition, has failed to exert adequate pressure on the financially incompetent ULP regime. SVG is heavily in debt, yet Eustace does nothing but collect his salary.
Everyone is aware that the ULP government's debt has grown too big and our devastated economy is struggling. SVG suffered substantial losses in the Colonial Life Insurance Company and British American Insurance companies. SVG's debt dwarfs SVG's economic output.
A report into the banking collapse accused Haarde and the central bank chief of acting with "gross negligence" in allowing the financial sector to overheat without adequate oversight. The sale of the NCB was unprecedented, as is the level of SVG's debt, due to a lack of adequate oversight.
In 2006, the SVG parliamentary approved overdraft limit was $40m, but the ULP government current account overdraft at the NCB was over $136m, and was not authorised by parliament. The SVG 1979 Constitution mandates for a contingency fund. If Eustace and Gonsalves had complied and set up a contingency fund, there would have been no need to sell 51% of NCB.
The ULP regime has seriously hampered the Constitutional Director of Audit's ability to perform the duty of keeping an eye on SVG's finances, by not supply information requested. The ULP regime has failed to give reasons for expenditure or implemented measures the Director of Audit considers necessary in order to ensure that public funds are properly spent.
In Iceland, protesters have taken to the streets of Reykjavik today, forcing MPs to run away from the people they represent, as renewed anger about the impact of the financial crisis in Iceland. Anger has flared because of the increasing numbers losing their homes.
In Iceland there was said to be a litany of mistakes made in the lead-up to the bank meltdown and debt got too big and overwhelmed the financial system when they ran into trouble with excessive risk-taking. In SVG, excessive risk-taking led to the NCB fiasco.
There is ample evidence in the constitutional Director of Audit's report to indict Eustace and Gonsalves for negligence in managing SVG finances. Ralph Gonsalves is Minister of Finance and Arnhim Eustace is the chair of the PAC. SVG's finances are in a total shambles.
'An indictment will tell politicians that their posts are associated with great responsibility and that the law dictates that this responsibility be interpreted in the strictest sense; they shouldn't just sit there and look pretty,' said Gunnar Helgi Kristinsson, a professor in political science at the University of Iceland.
Vote Green for jobs and a strong economy run legally in accordance with the SVG 1979 Constitution.