Iceland votes in president for fifth term

Mon, Jul 2, 2012, 01:00

OLAFUR RAGNAR Grimsson has won a fifth term in office as Iceland’s president, with the voters looking for a safe pair of hands to guide the country through its tentative economic recovery and negotiations over European Union entry.

The 69-year-old former university professor, who has held the position largely unopposed since 1996, received 53 per cent of the vote, seeing off competition from five others, including prominent journalist Thora Arnorsdottir.

Ms Arnorsdottir, who was placed second, with 33 per cent, drew international attention when she entered the race in March seven months pregnant, taking a few weeks out last month to give birth before returning to work. She campaigned on the platform of making the office less political and more ceremonial.

The president has long had the power to veto legislation and force a referendum on a Bill, but Mr Grimsson has drawn criticism for being the only president to have used this power. Most notably, Mr Grimsson vetoed two proposals by the Icelandic parliament to repay £3.1 billion to Britain and the Netherlands for debts the government incurred after Icesave. This was the online banking arm of failed lender Landsbanki, which collapsed during the financial crisis.

Mr Grimsson had been criticised for supporting the banking sector before the crisis, but his veto restored his popularity.

The failure of Iceland’s three big banks – Kaupthing, Landsbanki and Glitnir – in 2008 led to the collapse of Iceland’s currency, the government and much of the economy. It caused a 10 per cent decline in gross domestic product and a sevenfold increase in unemployment. The country is only now beginning to recover. It returned to growth last year after its debt was upgraded from “junk” to investment grade by Fitch in February. Iceland put Geir Haarde, its former prime minister, on trial this year. It has also begun legal proceedings against bankers in once-senior positions.

One significant issue for Iceland is its possible entry into the EU. Negotiations are under way, but fishing quotas are a sticking point. – (Copyright The Financial Times Limited 2012)