Iceland’s president, Olafur Ragnar Grimsson, has vetoed a controversial bill designed to compensate the UK and Netherlands for people who lost money when the Icelandic bank Landsbanki collapsed last year. A quarter of the country’s population had signed a petition opposing the Bill. President Grimsson is going to put the bill to a referendum.
This is fascinating on any number of levels. The compensation deal was negotiated by the Icelandic government with their British and Dutch counterparts, and it seems to be a pre-condition for the country receiving IMF loans. Backsliding on it would also kill Iceland’s hopes for rapid accession to the EU.
The veto is particularly interesting to the select band of people who take an interest in semi-presidential politics. Iceland’s president is directly elected, but fulfils a primarily ceremonial role. The power to refer proposed laws to a referendum was inherited from the reserve powers of the Danish crown when Iceland became independent in the 1940s, and has never hitherto been used. There is an idea in constitutional theory that an office’s unused powers atrophy and effectively become unusual, but in this case President Grimsson has shown that, in times of crisis, moribund powers can suddenly spring back into life.
Iceland leader vetoes bank repayments bill (BBC)
Iceland president vetoes collapsed Icesave Bank's bill to UK (Guardian)