Defiance against debt ‘bullies’ wins Iceland president record fifth term

Icelandic President Olafur Grimsson has won a record fifth term in office, riding a wave of support for his defiance of Britain and the Netherlands over massive debts from a bank crash and asserting the tiny nation’s stubbornly independent streak.

A combative former leader of a now defunct left-wing party, he became a symbol of resistance after the 2008 collapse of Iceland’s banks by taking the unprecedented step of refusing to sign into law government bills on repayment of money lost in the crash to its larger European neighbours.

In doing so, Mr Grimsson, 69, emboldened a presidential office that had up until then played a mainly ceremonial role and put himself at loggerheads with the centre-left government as well as international creditors. Mr Grimsson, who, unlike the government, opposes joining the European Union, won 52.8 per cent of the vote in Saturday’s election to beat his closest rival, television journalist Thora Arnorsdottir, 37, who won 33.2 per cent, the final tally showed yesterday.

“A good majority of the population has declared support for the work and the views I have been putting forward,” he said on Iceland television. “I’m deeply grateful for the support.”

Mr Grimsson, who served as finance minister from 1988-1991, was once seen as a cheerleader for the freewheeling overseas expansion of Iceland’s banks but revived his local standing when he resisted international pressure over the debt deals and spoke out against what he saw as foreign bullying of the island.

When the nation’s top banks collapsed in the space of a week in 2008, the country adopted a strategy to compensate local savers but not overseas ones, the bulk of which were British and Dutch depositors with so called Icesave online accounts.

The two countries later demanded repayment of about £3.2 billion they spent compensating domestic savers, triggering a fierce international row. Twice, deals with the Icelandic government were agreed only for Mr Grimsson to refuse to sign them.

While Iceland has begun repayments, international courts are still considering the legality of Iceland’s actions.

By effectively vetoing the agreements he broke well over half a century of political tradition and staked out a claim for a much more active and powerful presidential office, a course he has pledged to continue.

“The result is clear support for the democratic revolution that has followed the Icesave case here,” he said yesterday.

“There is a strong wish for more direct democracy. These elections were not about me or the other candidates, but about the power of the people.”

The country of just 320,000 people endured more than two years in deep recession following the financial meltdown, but has since made a surprisingly strong recovery.

Still, unemployment remains high and the austerity measures needed to meet the terms of an international bailout received at the height of the crisis has left the established political parties, already tainted by the collapse, mistrusted by many.

The election was a single round and the candidate with the most votes wins a four-year term.