Ex-Prime Minister of Iceland Convicted on Charge Related to Financial Crisis

Iceland’s former prime minister, Geir H. Haarde, was found guilty of failing to keep his cabinet informed of major developments during the 2008 financial crisis, but was cleared of three more serious charges of negligence on Monday.

Mr. Haarde was acquitted of three charges that were linked to his management during Iceland’s economic collapse in 2008, which could have resulted in a jail sentence. A Reykjavik court ruled that Mr. Haarde would not receive any punishment on the one guilty count, and that his legal expenses would be covered.

Mr. Haarde was the first politician to face a court over his actions — or, in this case, inactions — during the financial crisis as three of the nation’s largest banks collapsed. He was accused of not doing enough to avoid the failure of the banking system and the economy, which forced the country to seek financial help from the International Monetary Fund.

Outside the court on Monday, Mr. Haarde called the one guilty charge “very laughable” and said it was “silly.”

Public opinion has been largely split over the case against the former prime minister, with some people saying they hoped it would help society learn from the traumatic missteps of government leaders, while others told pollsters it amounted to scapegoating by criminalizing incompetence. Mr. Haarde had pleaded not guilty on all charges and said the case was a “political vendetta.” He also insisted that nobody in the government at the time had realized that the banks, which had grown too much and too fast, posed a threat to the economy.

Several witnesses had supported Mr. Haarde during the trial, saying that no one person should be held accountable for the demise of Iceland’s banking system and its economy.

Prosecutors have also indicted the former heads of Kaupthing, one of the three failed Icelandic banks, on charges of fraud and market manipulation. Hreidar Mar Sigurdsson, Kaupthing’s former chief executive, and Sigurdur Einarsson, the former chairman, have pleaded not guilty and are due in court later this year.

Mr. Haarde, 61, served as prime minister from June 2006 to February 2009, when his center-right Independence Party was ousted in general elections by a coalition of the Social Democrats and the Left-Green Movement under Johanna Sigurdardottir.

Iceland’s largest banks defaulted in 2008, and in a matter of weeks the country’s unemployment rate jumped, house prices collapsed and its currency plunged.

The country’s authorities quickly went after the main protagonists of the crisis, including top executives of Iceland’s banks. A special prosecutor said earlier it might indict as many as 90 people, among them Larus Welding, the former chief executive of failed Glitnir Bank, who is awaiting trial.

Iceland has managed to recover since the 2008 crisis, helped by its traditional tourism and fishing industries. Some economists have argued that the collapse of its banks forced the country to deal with its problems faster and aided a swifter recovery.

Moody’s Investors Service, the rating agency, said in February that it expected Iceland’s economy to grow 2.5 percent this year and next and government debt to fall below 100 percent of gross domestic product in 2013.