REYKJAVIK Iceland's former prime minister was found innocent on Monday of three major charges of negligence related to the country's 2008 economic collapse, and guilty of a smaller count that carried no prison sentence.
The verdict by a special court was seen by many as little more than a slap on the wrist for Geir Haarde, the only leader in the world to face prosecution over the global crisis. He had faced up to two years in prison if found guilty of the more serious charges, including neglecting to deal with an overblown banking sector.
Haarde looked on and showed no visible emotion as the 15-judge court issued its verdict, convicting him of failing to hold dedicated cabinet meetings ahead of the crisis. About 70 people, including his family and political supporters, attended the session.
Moments later, he told reporters that the judges had tried to appease a public opinion angry at a political elite perceived as fostering an unsustainable banking system that grew to 10 times Iceland's GDP just before the meltdown.
"It is absurd," a furious-looking, red-faced Haarde said.
"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," he added.
Outside the court, a protester banged on a pot, in a repeat of the gesture that Icelanders carried out at the height of the crisis in the streets outside parliament. The protests were the biggest ever seen in Iceland, occasionally turning violent in a nation renowned for its peaceful nature.
All of Iceland's top banks went under in 2008 just days after the collapse of Lehman Brothers, which led to a freeze on global interbank lending. The country's crown currency nosedived and many Icelanders who had taken out foreign currency loans found themselves saddled with even bigger piles of debt.
Despite the anger, many Icelanders say the 61-year-old Haarde, generally seen as a decent person who was too soft in his role as prime minister, should not have been the only politician put on the stand.
"He was the captain on the bridge, but there were more ministers," said Arni Einarsson, a pensioner. "The politicians thought that Iceland was like the Titanic - unsinkable."
Prime Minister Johanna Sigurdardottir, who served in Haarde's cabinet during the boom years that preceded the crisis, said the verdict had taken her by surprise.
"I never thought the charges were sufficient to warrant the indictment and subsequent trial," she told state television.
Haarde said that while his government could have done something different in the run up to the island's worst-ever crisis, he doubted he could have stopped it.
"Look at what the leaders of the central banks of the U.S., the UK have said repeatedly - they didn't see this crisis coming. The IMF didn't see this crisis coming," he told Reuters after the verdict, which was broadcast live on TV.
"Look at what is happening in Greece, Spain, Portugal, Ireland, Italy. Our situation is not unique."
Haarde, who had pleaded innocent to all charges, said he is considering taking his case to the European Court of Human Rights.
Eirikur Bergmann, political science professor at the Bifrost University north of the capital, called the ruling "a slap on the wrist".
"He's not convicted on any of the charges leading up to the crisis - sponsoring the system that proved unsustainable," said Bergmann. "It is an in-between ruling to calm both sides of society."
Though the economy is recovering from the crisis and Iceland successfully completed a bailout program led by the International Monetary Fund, people remain distrustful of state institutions. Polls show that parliament has the support of only 10 percent of the public.
Capital controls remain in place, damaging the economic recovery.
(Writing by Alistair Scrutton, additional reporting by Omar Valdimarsson in Reykjavik and Anna Ringstrom and Niklas Pollard in Stockholm; Editing by Alessandra Rizzo)