Haarde, Geir (Iceland)

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Stepping down as prime minister in June 2006 following poor municipal election results, Halldór Ásgrímsson nominated Geir Haarde as his successor. An economist and former finance minister, Haarde has been the leader of the centre-right Independence Party (SSF) since 2005. He retained the premiership following parliamentary elections in May 2007, but his second term was largely overshadowed by economic contraction and a banking collapse. Following mass protests throughout late 2008 and early 2009 and the breakdown of talks with his coalition partner, the Social Democrats, Haarde announced the resignation of the government on 26 Jan. 2009.

Early Life

Geir Hilmar Haarde was born in Reykjavík on 8 April 1951. He attended university in the USA, initially as a Wien scholar at Brandeis University in Massachusetts, graduating in economics. He subsequently received masters degrees from Johns Hopkins University (1975) and the University of Minnesota (1977) before returning to Reykjavík to work as an economist in the central bank’s international department. He also lectured in economics at the University of Iceland from 1979–83.

In 1983 he began working as an adviser to the finance minister, a position he held until the parliamentary elections of 1987, when he entered the Alþingi (Parliament) as a representative of the centre-right SSF. For years the country’s largest party, the SSF had become embroiled in divisive leadership struggles in the mid-1980s and received only 27% of votes cast in the 1987 election.

Haarde became a member of the Nordic Council in 1991, the year in which the SSF, reunited under Davíð Oddsson, claimed almost 40% of the popular vote in parliamentary elections. Haarde served as a member of the foreign affairs committee (1991–98) and joined the executive committee of the Inter-Parliamentary Union (1994–98). From April 1998 to Sept. 2005 he served as minister of finance in an SSF–Progressive Party (PP) coalition, led by Oddsson. The government’s free-market reforms stimulated strong economic growth, underpinned by the fisheries sector and aluminium production.

Appointed foreign minister in Sept. 2005, Haarde served under Halldór Ásgrímsson (of the PP), who had replaced Oddsson as prime minister a year earlier. Haarde was elected chairman of the SSF in an uncontested election following Oddsson’s departure. When Ásgrímsson resigned the premiership in the wake of his party’s poor showing in Reykjavík’s municipal elections on 27 May 2006 he nominated Haarde as his successor as prime minister.

Career Peak

Haarde was inaugurated on 15 June 2006. He pledged to continue diversifying the economy away from its dependence on fisheries and welcomed the opening of a controversial aluminium smelter at Reyðarfjörður. He also promised to tackle the overheating economy and bring inflation down to around 2.5%. Haarde confirmed Iceland’s contribution to international peacekeeping forces in Afghanistan and Sri Lanka. In Oct. 2006 the government lifted Iceland’s longstanding moratorium on commercial whaling. Following legislative elections in May 2007, in which the SSF remained the largest party, the Progressive Party (FSF) withdrew from the ruling coalition and was replaced by the Social Democratic Alliance, giving Haarde a more secure governing majority.

However, by 2008 Iceland’s economy was in serious difficulties owing to the huge amount of foreign debt incurred by its banks. This led in Oct. to a banking meltdown, described by the International Monetary Fund (IMF) as the largest collapse in banking history relative to the size of an economy. As the currency tumbled, Haarde’s government took control of all three of the country’s major banks in an effort to stabilize the financial system and in Nov. applied for emergency loan support from the IMF, which agreed a US$2·1bn. 2 year standby programme. Nordic countries also agreed to provide an extra US$2·5bn. The IMF meanwhile forecast that Iceland’s economy would contract by about 10% in 2009.

Following demonstrations demanding that the government resign in the wake of the economic collapse, Haarde called a general election for 25 April, two years early. Nevertheless just days later, following the breakdown of relations with the Social Democrats, Haarde announced the resignation of his government. He was replaced by Jóhanna Sigurðardóttir of the Social Democrats, who became Iceland’s first female prime minister.

Later Life

Haarde was appointed Iceland’s ambassador to the United States in Feb. 2015.

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