Iceland's economy suffered a near total collapse when its banks were laid low by the global credit crunch. The public lost their jobs and savings and now the government wants to know why.
Eva Joly will lead the investigation into Iceland's banking collapse
In an effort to thoroughly investigate the economic collapse and related crimes, the Icelandic government has sought help from a prominent European figure. Newly elected MEP Eva Joly, the Norwegian-born French magistrate who became famous as the lead judge in the Elf Aquitaine corruption scandal, acts as special adviser to Iceland‘s authorities.
Deutsche Welle: Ms Joly, how would you compare this investigation with the Elf Aquitaine affair?
Eva Joly: This is much huger, much much more important. This bankruptcy is much bigger than Enron, involving a lot of people, involving other banks, and really the investigation is huge.
What about the time and costs involved?
It will probably be expensive. I calculated that in order to pay for people and experts from abroad – and we need highly trained experts – we will need some three million Euros a year. And it will take a long time, it's impossible to say how long at the moment. That will depend on what kind of cooperation we will get from abroad and how far we will go. But I think that we can reasonably say that within two or three years, we should have some cases ready to go to court. If I judge by the ELF case we could even spend up to seven years.
Many people in Iceland lost their savings when the banks collapsed
Why is it so important to spend time and money chasing "white collar criminals"?
I think it is of the utmost important for Iceland to carry out this investigation for the social contract to function. For people to have the courage to go on to live here because what we see today is that people are full of despair and many of them are moving away. They are taking jobs in Norway and that must not happen. People must stay, they must fight, they must fight for their culture and for justice, and I think here, like in all the Nordic countries, the feeling of justice is very important - and today there is a total feeling of injustice. We have a huge responsibility to show that the institutions are able to carry out this inquiry and that the culprits will be convicted.
Only a couple of weeks ago you threatened to step down from your post. What was the problem?
Well, you know, here in Iceland it's a very small country. There are only 300.000 inhabitants and people are closely linked. You always meet the wife of somebody, or the cousin, or the uncle. So it happens that the state prosecutor's son is involved in the inquiry, so he is inhabile and he didn't resign from his office and I was very much afraid of that because that could jeopardize the investigation. So I asked for his resignation and I asked for more money to do the investigation and for more people. I do not want to be an alibi. Because I am here, people think that this investigation is serious, so I must always ensure that things are done correctly.
Extra staff will now be made available for you, including three independent prosecutors. What about the state prosecutor, who will obviously have to stay out of the investigation?
He doesn't want to step down because he's protected by law, you see, and this is normal in a democracy. But this situation has not been foreseen by any law. I think the possibility to have an ad hoc state prosecutor is meant for small cases, when one of your relatives is involved in stealing a little motorbike for instance that could be the case. But when it is the whole economic system, all the institutions in the country are involved. What sense does it have to say I will stay state prosecutor and be isolated and not be able to participate in the most important debates?
How do you feel the European community has reacted to Iceland's financial collapse
Iceland has been dealt with in a very rough manner. I think it was a European issue. Iceland is a member of the European Economic Community and it was our common bank system that was involved, the common regulators were involved and I think we could have sought a European solution for Iceland!
Joining the EU could restore some calm to Iceland
What are your thoughts on EU membership for Iceland?
I think from the EU point of view that it would be very interesting for us to have Iceland on board. It's a very old civilization and they have solid democratic traditions that would reinforce the Nordic culture of transparency and good governance. And they also have resources that are important for Europe like energy and fish. So I think it would be very nice for us - and also for them - to be part of the European Union.
Interview: Susanne Henn
Editor: Rob Turner