ICELAND’S PRESIDENT Olafur Ragnar Grimsson, who turned his ceremonial office into a position of power and rejected a deal that would have put taxpayers on the hook for $5 billion to Britain and the Netherlands, has been re-elected to a fifth term.

The vote makes him the longest-serving president in Icelandic history. Heavily criticised after the financial crisis for cheerleading the overheated business sector, he earned back support from ordinary Icelanders and became a symbol of defiance by refusing to sign legislation that would have made taxpayers pay back British and Dutch deposits in a failed online bank.

The election Saturday hinged on how politically active the president should be. Iceland is a parliamentary democracy in which the president has traditionally been seen as a figurehead. However, the president can refuse to sign into law bills passed by parliament, triggering a voter referendum. Grimsson was the first president to wield that power.

In a preliminary count, Grimsson took 52.2 per cent of the vote. Closest challenger Thora Arnordsdottir, who ran on a platform that the president should not have political views and play an active role in promoting business, had 33.8 per cent.

In his New Year’s Address, Grimsson insinuated that he would not seek re-election, but decided to after being urged by a petition signed by 30,000 Icelanders. He has repeatedly said he believes he owed it to the Icelandic people to run again.

Iceland’s banking sector ballooned to nine times the tiny nation’s annual gross domestic product in a decade of boom, before collapsing under the weight of debt in October 2008. The country’s three main banks collapsed in a single week.

The failure of Icesave, an online subsidiary of Landsbanki bank, left 340,000 British and Dutch citizens out of pocket. Both Britain and The Netherlands reimbursed their citizens’ deposits and are still seeking repayment. Voters rejected the government-backed deal to repay them last year in a referendum — sending the dispute to an international court.