Iceland Basic Facts - History

Population 2006 ...........................................................299,388
GDP per capita 2006 (Purchasing Power Parity, US$).........38,100
GDP 2006.......... (Purchasing Power Parity, US$ billions)...............11.1

Average annual growth 1991-97
Population (%) ....... .8
Labor force (%) ....... .8

Total Area...................................................................39,768 sq. mi.
Poverty (% of population below national poverty line)...... 26
Urban population (% of total population) ...............................92
Life expectancy at birth (years)..................................................... 79
Infant mortality (per 1,000 live births)........................................ 6
Access to safe water (% of population) ....................................100
Illiteracy (% of population age 15+) ...........................................0

History of Iceland

Iceland apparently has no prehistory. According to stories written down some 250 years after the event, the country was discovered and settled by Norse people in the Viking Age. The oldest source, Íslendingabók ( The Book of the Icelanders), written about 1130, sets the period of settlement at about 870–930 ce . The other main source, Landnámabók (The Book of Settlements), of 12th-century origin but known only in later versions, states explicitly that the first permanent settler, Ingólfr Arnarson, came from Norway to Iceland to settle in the year 874. He chose as his homestead a site that he named Reykjavík, which he farmed with his wife, Hallveig Fródadóttir. The Book of Settlements then enumerates more than 400 settlers who sailed with their families, servants, and slaves to Iceland to stake claims to land. Most of the settlers came from Norway, but some came from other Nordic countries and from the Norse Viking Age settlements in the British Isles.

A layer of tephra (volcanic ash) that in many places coincides with the earliest remains of human habitation in Iceland has been identified in Greenland ice and dated to about 870. Archaeological finds also support the documentary evidence and place Iceland among Norse Viking Age settlements of the late 9th or early 10th century. The Icelandic language testifies to the same origin Icelandic is a Nordic language and is most closely related to the dialects of western Norway.

Although the island was not populated until the Viking Age, Iceland probably had been known to people long before that time. The 4th-century- bce Greek explorer Pytheas of Massalia (Marseille) described a northern country that he called Thule, located six days’ sailing distance north of Britain. In the 8th century Irish hermits who had begun to sail to Iceland in search of solitude also called the island Thule. It is unknown, however, if Pytheas and the hermits were describing the same island. According to the early Icelandic sources, some Irish monks were living in Iceland when the Nordic settlers arrived, but the monks soon left because they were unwilling to share the country with heathens.



Iceland, an island about the size of Kentucky, lies in the north Atlantic Ocean east of Greenland and just touches the Arctic Circle. It is one of the most volcanic regions in the world. More than 13% is covered by snowfields and glaciers, and most of the people live in the 7% of the island that is made up of fertile coastland. The Gulf Stream keeps Iceland's climate milder than one would expect from an island near the Arctic Circle.


The earliest inhabitants of Iceland were Irish hermits, who left the island upon the arrival of the pagan Norse people in the late 9th century. A constitution drawn up c. 930 created a form of democracy and provided for an Althing, the world's oldest practicing legislative assembly. The island's early history was preserved in the Icelandic sagas of the 13th century.

In 1262?1264, Iceland came under Norwegian rule and passed to ultimate Danish control through the unification of the kingdoms of Norway, Sweden, and Denmark (the Kalmar Union) in 1397.

In 1874, Icelanders obtained their own constitution, and in 1918, Denmark recognized Iceland, via the Act of Union, as a separate state with unlimited sovereignty. It remained, however, nominally under the Danish monarchy.

During the German occupation of Denmark in World War II, British, then American, troops occupied Iceland and used it for a strategic air base. While officially neutral, Iceland cooperated with the Allies throughout the conflict. On June 17, 1944, after a popular referendum, the Althing proclaimed Iceland an independent republic.

Iceland Hit Hard by Financial Crisis

The country joined the North Atlantic Treaty Organization in 1949 and subsequently received an American air force base in 1951. In 1970, it was admitted to the European Free Trade Association. Iceland unilaterally extended its territorial fishing limit from 3 to 200 nautical miles in 1972, precipitating a dispute with the UK known as the ?cod wars,? which ended in 1976 when the UK recognized the new limits. In 1980, the Icelanders elected a woman to the office of the presidency, the first elected female chief of state (i.e., president as distinct from prime minister) in the world. After the recession of the early 1990s, Iceland's economy rebounded.

At the International Whaling Commission meeting in July 2001, Iceland refused to agree to the continuation of the moratorium on commercial whaling that had been in effect since 1986. In 2003, after a 14-year lull, the country began hunting whales for scientific research.

In May 2003, David Oddsson was reelected, making him the longest-serving prime minister in Europe. In 2004, in a prearranged agreement made between the two parties of the coalition government, Oddsson and Foreign Minister Halldr sgrmsson switched positions. In June 2006 sgrmsson resigned as prime minister after his party did badly in local elections. Economic troubles were cited as the main reason for the Progressive Party's poor showing. Geir Haarde, leader of Iceland's largest political party, the Independence Party, became prime minister and announced the implementation of more fiscally conservative measures.

On October 9, 2008, amidst international stock market turmoil, the Icelandic stock exchange suspended trading and the government decided to nationalize three major banks. In November 2008, the IMF extended a $2 billion rescue package to Iceland to help its battered currency and stock market. Despite the aid, the financial crisis continued into 2009, prompting demonstrations against the government. Prime Minister Geir Haarde resigned on January 26, 2009, causing the collapse of Iceland's government. On February 1, 2009, Johanna Sigurdardottir was sworn in as the new prime minister, becoming Iceland's first female prime minister and the modern world's first openly gay head of government. In April parliamentary elections, Sigurdardottir's center-left coalition won 34 out of 63 seats.

In a March 2010 referendum, voters in a landslide rejected the government's proposal to reimburse Britain and the Netherlands for $5 billion in losses incurred in the collapse of Landsbanki in 2008.

Ash Plume Wreaks Havoc on Air Travel

In late March 2010, the Eyjafjallajokull volcano erupted. The event produced minimal seismic activity, but an explosion on April 14 resulted in a volcanic ash plume in the atmosphere over northern and central Europe. Air travel in the region was halted for several days, causing the cancellation of several thousand flights and disrupting the travel plans of millions of people.

In a bit of an anticlimax, the former Icelandic prime minister, Geir Haarde, was acquitted of charges of negligence stemming from the 2008 financial crisis. He was found guilty of not holding enough cabinet meetings, but the verdict carried no sentence.

The June 2012 presidential election saw the reelection of lafur Ragnar Grmsson with 52.8% of the vote. The other candidates included Thra Arnrsdttir and Ari Trausti Gudmundsson who polled 33.2% and 8.6% respectively. Turnout was 69.2%.

Iceland not Enthusiastic About Joining the EU

In April 2013's legislative elections, Sigmundur David Gunnlaugsson's center-right Progressive party and the Independence party made significant inroads against the incumbent Social Democrats. As the new prime minister of the new coalition government, Gunnlaugsson announced a suspension of EU membership talks, and called for a referendum to gauge public opinion on future EU membership.

  • OFFICIAL NAME: Republic of Iceland
  • FORM OF GOVERNMENT: Constitutional republic
  • CAPITAL: Reykjavík
  • POPULATION: 317,000
  • OFFICIAL LANGUAGE: Icelandic (Others include: English, Nordic languages, German)
  • MONEY: Icelandic króna
  • AREA: 39,769 square miles (103,001 square kilometers)


Iceland is a small island nation that is Europe's westernmost country and home to the world’s northernmost capital, Reykjavik. Eleven percent of the country is covered in glacial ice and is surrounded by water. If global warming continues, rising water levels and melting ice could be devastating to Iceland.

A volcanic island, Iceland experiences severe volcanic activity. In 2010, the Eyjafjallajokull volcano at an elevation of 5,466 feet (1,666 meters) erupted, blowing ash high into the atmosphere and disrupting European air traffic for weeks.

Iceland is located between the Greenland Sea and the North Atlantic Ocean. It is northwest of the United Kingdom, and is slightly smaller than the state of Kentucky.

The land is plateau with mountain peaks, and ice fields, with a coastline marked by fjords, which are deep inlets carved by glaciers.

Map created by National Geographic Maps


Icelanders are of Scandinavian descent and are generally tall, blonde, and light-skinned. Because there is little diversity in the population, genetic researchers have studied diseases among Icelanders. These studies have helped find cures for many hereditary diseases.

Icelanders take care to preserve their traditions and language. Some Icelanders still believe in elves, trolls, and other mythical characters that date back to their Celtic and Norse beginnings. Most Icelanders live in the southwest part of the country.

School is free for all Icelanders all the way through college. Every student is taught to speak both Danish and English in school. Handball and soccer are the two most popular sports for children, but they also enjoy swimming and horseback riding.


Foxes were the only land mammals in Iceland when it was settled. Newcomers brought in domesticated animals and reindeer. Most of the wildlife is under conservation and protection. There are four national parks and more than 80 nature preserves.

Vatnajökull, or Vatna Glacier, is an extensive ice field in southeastern Iceland, which covers 3,200 square miles (8,400 square kilometers) with an average ice thickness of more than 3,000 feet (900 meters).

Iceland contains about 200 volcanoes and has one-third of Earth’s total lava flow. One-tenth of the total land area is covered by cooled lava beds and glaciers. Because Iceland is volcanic, almost all of their electricity and heating comes from hydroelectric power and geothermal water reserves.

The Gulf Stream current and warm southwesterly winds make the climate more moderate and pleasant than one might expect from a northern country.

Iceland is known for explosive geysers, geothermal spas, glacier-fed waterfalls like Gullfoss (Golden Falls), and whale watching. More than 270,000 tourists visit each year.


The country is governed by a president, who is elected by popular vote for a four-year term. There are no term limits so the president can stay in power until another is elected by the people.

The 2008 election was not held because no one ran against Ólafur Ragnar Grímsson, who served that term and was then re-elected in 2012.

6 Facts About Iceland That You Might Not Have Heard Of Making It The Safest Country In The World, As Shared By This TikTok User

Many people think that TikTok is an app for children and teenagers that can give no value, but that’s not entirely true. Like any other platform, TikTok has its own video genres, like dancing, sport, book, and animal videos. Naturally there’s an educational side to it too. Specialists come to share their knowledge, but also people who like to share cool things they found out so that you can know about them too.

Today we will be looking at a video made by @livvontheedge in which she shared that Iceland is the safest country in the world and explained what makes the country so good to live in. People loved the video, and it is one of the most viewed videos on her account, seen by 13.6M people and 4.1M left a heart on it.

This TikToker made a video about the safest country in the world, which is Iceland, and it seems that it’s a pretty cool place to live

The TikToker’s handle lets us assume that her name is Olivia and she has 1.2M followers on her account. You would love her content if you enjoy creepy facts, mysterious occurrences and true crime stories.

But the video about Iceland isn’t creepy at all on the contrary, it highlights the good side of living there. Bored Panda has another article with a list of interesting and cool facts about Iceland, so if you would like to know more about this beautiful and amazing country, you can click here after you’re done with this one.

The crime rate is very low, so police officers don’t carry guns

In 2018, the homicide rate was 0.9 per 100,000 inhabitants

Olivia begins with the fact that police officers don’t carry guns with them. And the SWAT team do possess firearms, but they rarely have to use them. After all the negative media attention to police officer violence in the USA, the woman thinks that this makes the Icelandic policemen very approachable.

They don’t have to carry guns most probably because the crime rate, especially violent crime, rate is so low. Olivia stated that the murder rate is between 0 and 1.5 a year, which is true. According to United Nations Office on Drugs And Crime, in 2018, Iceland had 3 homicides, which is 0.9 victims per 100,000 inhabitants.

According to Olivia’s research, crime rates are low because higher education is affordable, unemployment rates are low, and there are safety nets in place

According to Olivia’s research, there are not a lot of reasons to commit crime, since everyone can afford a college degree, needing to pay an amount that is less than a month’s rent. This may surprise you, but students have to only pay an annual registration fee that, at the University of Iceland, is ISK 75,000 ($612). Another reason for the low crime rate that Olivia points out is that the employment rate is high, and in case someone needs support, there are safety nets in place.

Iceland is the number one in gender equality and their pride wasn’t protested once

Iceland is a place of equal rights. Iceland is in first place in the World Economic Forum’s Global Gender Gap Index, which means it’s the place in the world right now for women. LGBTQ rights are also very progressive in the country. Olivia mentions that their pride is the only one that has never been protested.

There are no harmful animals and, luckily for Icelanders, there are no mosquitoes

Not only are the people amazing, tolerant and smart, but nature itself is not dangerous at all. If you would be afraid to live in Australia because of all the venomous insects and gigantic spiders, Iceland doesn’t have any of that. The only native land mammal is the arctic fox, which is not harmful to humans, and what is more, there are no mosquitoes.

Icelanders feel safe enough to leave their babies in strollers alone outside to sleep

The last thing that Olivia brings up that indicates Iceland is the safest country in the world is that people aren’t afraid to leave their babies in strollers to sleep outside. It is actually a common practice in the Nordic countries to leave their babies to sleep outside in winter because they believe it boosts their immune system. But the essential thing here is that people are not afraid to leave their babies alone, because they know no one will harm them.

You can watch the full video here

Iceland is pretty amazing! What do you think about these facts Olivia found? Maybe you’re an Icelander and can confirm or deny any of these? We’re curious to hear your opinions!


The first people to settle in Iceland were probably Irish monks who came in the 8th century. However, in the 9th century, they were driven out by Vikings.

According to tradition the first Viking to discover Iceland was a man named Naddoddur who got lost while on his way to the Faeroe Islands. Following him, a Swede named Gardar Svavarsson circumnavigated Iceland about 860. However, the first Viking attempt to settle was by a Norwegian named Floki Vilgeroarson. He landed in the northwest but a severe winter killed his domestic animals and he sailed back to Norway. However, he gave the land its name. He called it Iceland.

Then from 874 many settlers came to Iceland from Norway and the Viking colonies in the British Isles. A Norwegian named Ingolfur Arnarson led them. He sailed with his family, slaves, and animals.

When he sighted Iceland Ingolfur dedicated his wooden posts to his gods then threw them overboard. He vowed to settle at the place where the sea washed them up. He then explored Iceland. When the posts were found in the southwest of Iceland Ingolfur and his household settled there. He called the place Reykjavik, meaning Smokey Bay. Many other Vikings followed him to Iceland.

The land in Iceland was free to whoever wanted it. A man could claim as much land as he could light fires around in one day while a woman could claim as much land as she could lead a heifer round in one day.

There were very good fishing grounds around Iceland and the land was well suited to sheep. Many Vikings brought flocks with them and soon sheep became a major Icelandic industry. The population of Iceland soared. By about 930 there were about 60,000 people living in Iceland.

At first the Icelanders were ruled by chiefs called Godar but there were some local assemblies. About 930 the Icelanders created an assembly for the whole island called the Althing.


In the 11th century, the Norwegians were converted to Christianity. The Norwegian kings sent missionaries to Iceland. Some Icelanders accepted the new religion but many were bitterly opposed. Eventually, a man named Thorgeir, who was the law speaker of the Althing, realized there was likely to be a civil war between the two. He may also have feared Norwegian intervention. (The Norwegians were quite prepared to ‘convert’ people to Christianity by force!). He persuaded the people to accept a compromise. Christianity became the ‘official’ religion of Iceland but pagans were allowed to worship their gods in private.

From 1097 people in Iceland had to pay tithes to the church (in other words they had to pay one-tenth of their produce). As a result, the church grew rich and powerful. Paganism was stamped out and monasteries were built. Iceland was given a bishop in 1056. In 1106 another bishopric was created at Holar in the north.

However in 1152 the Icelandic church came under the authority of a Norwegian archbishop. In those days the church was closely allied to the state. When the Icelandic church became subordinate to the Norwegian church it meant the Norwegian king’s influence in Iceland slowly increased.

Meanwhile during the 12th-century conditions in Iceland deteriorated. It may have been partly due to overgrazing. The forests were also cut down and the result was soil erosion. With no wood to build ships, the Icelanders were dependent on Norwegian merchants. At that time wool, animal hides, horses, and falcons were exported from Iceland. Timber, honey, and malt for brewing were imported. Some Icelanders began to look to the king of Norway to protect trade.

The Icelandic Commonwealth was also undermined by feuding between clans. Then in 1218 a man named Snorri Sturlung visited Norway and agreed to support the Norwegian king’s interests in Iceland. He returned home in 1220. Meanwhile, bishops who were born in Norway also supported the Norwegian king’s ambitions to rule Iceland.

However the commonwealth really ended because of the feuding between clans. The Icelanders desperately wanted peace and they eventually realized the only way to obtain it was to submit to the Norwegian king.

Therefore in 1262 an agreement called the Ancient Covenant was accepted by the Althing. The Icelanders agreed to pay a tax of woolen cloth each year. In return, the king promised to uphold law and order in Iceland. He also replaced the Godar with royal officials. In 1280 a new constitution was drawn up. The Althing continued to meet but its decisions had to be ratified by the king. Furthermore, the king appointed a governor and 12 local sheriffs to rule. Meanwhile, slavery slowly died out in Iceland.

The 14th and early 15th centuries troubled years for Iceland. In the early 14th century, the climate grew colder. Then in 1402-03, the Black Death struck Iceland and the population was devastated.

However, prosperity returned in the 15th century. At that time there was a big demand in Europe for Icelandic cod and Iceland grew rich on the fishing industry. Icelanders traded with the English and with the Germans. (At that time there was no single German nation but German ports were joined together in a federation called the Hanseatic League).

Meanwhile, in 1397 Norway was united with Denmark. Afterward, Iceland was ruled by the Danish crown.

During the 16th century Iceland, like the rest of Europe, was rocked by the reformation. Denmark became Protestant in the 1530s and in 1539 the Danish king ordered his men to confiscate the church’s land in Iceland. The bishops of Iceland resisted and in 1541 the Danish king sent an expedition to enforce conformity. Skalholt was given a new bishop but the bishop of Holar, a man named Jon Aranson continued to resist. He was a powerful chieftain as well as a bishop and he had soldiers to fight for him. He also had two sons, by his concubine, who supported him. In 1548 Aranson was declared an outlaw. His soldiers then captured the Protestant bishop of Skalholt. However, in 1550 he was defeated. Aranson and his two sons were executed.

Afterward the people of Iceland gradually accepted Protestantism and in 1584 the Bible was translated into Icelandic.

However during the 17th century the Icelanders suffered hardship. In 1602 the king made all trade with Iceland a monopoly of certain merchants in Copenhagen, Malmo, and Elsinore. In 1619 the monopoly was made a joint-stock company. The monopoly meant the Icelanders were forced to sell goods to the company at low prices and buy supplies from them at high prices. As a result, the Icelandic economy suffered severely.

Furthermore, in 1661, the Danish king made himself an absolute monarch. In 1662 the Icelanders were forced to submit to him. The Althing continued to meet but had no real power. It was reduced to being a court. Worse in 1707-09 Iceland suffered an outbreak of smallpox which killed a large part of the population.

In the mid 18th century a man named Skuli Magnusson was made an official called a fogd. He tried to improve the economy by bringing in farmers from Denmark and Norway. He also introduced better fishing vessels. He also created a woolen industry in Reykjavik with German weavers. Finally, in 1787 the monopoly was ended.

However, in 1783, the fallout from volcanic eruptions caused devastation in Iceland. By 1786 the population of Iceland was only 38,000. Finally, in 1800 the Althing closed. A new law court replaced it. It sat in Reykjavik which at that time was a little community of 300 people.


In the 19th-century ties between Iceland and Denmark weakened. Nationalism was a growing force throughout Europe including Iceland. One sign of this growing nationalism was the writing of the song O Guo vors lands in 1874.

In 1843 the Danish king decided to Christian VIII recall the Althing. It met again in 1845. However, it had little power. Yet nationalist opinion in Iceland continued to grow and in 1874 Christian IX granted a new constitution. However, under it the Althing still had only limited powers. Then in 1904, the post of governor was abolished and Iceland was granted home rule.

Meanwhile, in 1854 remaining restrictions on trade were removed. Trade with Iceland was opened to all nations. Furthermore, Icelandic fishing became much more prosperous in the late 19th century. Until then fishermen usually used rowing boats but by the end of the century, they had switched to much more effective decked sailing ships.


Iceland began to prosper once again. The population rose (despite emigration to Canada) and in 1911 Reykjavik University was founded.

In the 20th-century ties with Denmark were loosened. In 1904 Iceland was granted home rule. The post of governor was abolished. Instead, Iceland gained an Icelandic minister responsible to the Althing. Then in 1918, Iceland was made a sovereign state sharing a monarchy with Denmark.

In 1915 Icelandic women were allowed to vote. The first woman was elected to the Althing in 1922.

Then, in May 1940, Iceland was occupied by British troops. In May 1941 the Americans relieved them. Finally, in 1944, Iceland broke all links with Denmark and the joint monarchy was dissolved.

In 1947 Mount Hekla erupted causing much destruction but Iceland soon recovered and in 1949 Iceland joined NATO.

In the late 20th century Iceland had a series of ‘cod wars’ with Britain. Iceland relied on its fishing industry and grew alarmed that the British were overfishing its waters. The ‘cod wars’ were ‘fought’ in 1959-1961, 1972, and in 1975-1976.

In 1980 Vigdis Finnbogadottir was elected president of Iceland. She was the first n woman president in the world.


The people of Iceland benefit from natural hot water, which is used to heat their homes. It is also used to heat greenhouses.

In March 2006 the USA announced it was withdrawing its armed forces from Iceland.

Then in 2008, Iceland suffered an economic crisis when its 3 main banks failed. In 2009 demonstrations led to the fall of the government.

Today Iceland still relies on fishing but there are many sheep, cattle, and Icelandic ponies. Iceland suffered badly in the world financial crisis that began in 2008 and unemployment rose to over 9%. However, Iceland soon recovered and unemployment fell.

Today Iceland is a prosperous country with a high standard of living. In 2020 the population of Iceland was 364,000.


The Icelandic People

But what of the Icelandic people themselves? Who are these shark-eating Vikings that call this island home? Why are there so few of them, and how did they become so skillful at football?

All these questions and more are a part of the Icelandic mystique. Icelanders are proud and adventurous, capable of hurdling enormous and progressive steps in education, gender and LGBTQ+ rights, music, literature, renewable energy and, now, even sport.

Icelanders &ldquoofficially&rdquo came into existence on 17 June 1944, after the country became independent from the Danish monarchy following Germany&rsquos invasion of Denmark. It was then that the Republic of Iceland was born, though there had been settlers living on the island since as early as 870 AD.

These seafaring people were primarily from West Norway. The majority of the others were of Celtic origin, mainly from Ireland and the eastern coasts of Scotland, and usually brought here as slaves.

Today, contemporary Icelanders pride themselves as creative and intelligent members of modern democracy. Equal rights are at the forefront of politics, and the population is enthusiastic in its political activism. So too are they in the field of the arts every night in the country&rsquos cities, towns, and villages, live exhibitions of music, poetry, and artwork are readily held for a thirsty populace.

Did you find our country profile of Iceland helpful? Is there any crucial information that you believe we've missed? Please, feel free to leave your comments and queries in the Facebook comments box below!

4 The Yule Lads

As you&rsquore probably aware, most countries celebrate something similar to Christmas, but every place usually does it a little differently. Iceland is no exception to this rule. Instead of Santa Claus, Iceland has something called the Yule Lads. These strange lads have an interesting history because they didn&rsquot start out as bringers of Yuletide joy they were actually descended from trolls and were used the way parents today use the threat of taking away a video game console&mdashto scare small children.

However, in the 1700s a decree was issued that actually made it illegal for parents to do this, and eventually the Yule Lads became a Christmas tradition. The Yule Lads&mdashwho have heartwarming names like &ldquoSkyr Gobbler, &ldquoWindow Peeper,&rdquo and &ldquoBowl Licker&rdquo&mdasheach have their own colorful personality. They now visit every year, each one stopping by a day after the other.

How is Iceland governed?

Iceland is a constitutional republic with a multi-party system. The head of state is the President. Executive power is exercised by the Government. Iceland is arguably the world's oldest parliamentary democracy, with the Parliament, the Althingi, established in 930. Legislative power is vested in both the Parliament and the President. The judiciary is independent of the executive and the legislature.

Every fourth year the electorate chooses, by secret ballot, 63 representatives to sit in Althingi. Anyone who is eligible to vote, with the exception of the President and judges of the Supreme Court, can stand for parliament. Following each election, the President gives a leader of a political party the authority to form a cabinet, usually beginning with the leader of the largest party. If unsuccessful the President will ask another political party leader to form a government.

A cabinet of ministers stays in power until the next general election or a new government is formed. The ministers sit in Althingi, but only those elected have the right to vote in parliament.

The president is elected by direct popular vote for a term of four years, with no term limit.

Judicial power lies with the Supreme Court, Court of Appeal and the district courts.


In geological terms, Iceland is a young island. It started to form in the Miocene era about 20 million years ago from a series of volcanic eruptions on the Mid-Atlantic Ridge, where it lies between the North American and Eurasian plates. These plates spread at a rate of approximately 2.5 centimeters per year. [2] This elevated portion of the ridge is known as the Reykjanes Ridge. The volcanic activity is attributed to a hotspot, the Iceland hotspot, which in turn lies over a mantle plume (the Iceland Plume) an anomalously hot rock in the Earth's mantle which is likely to be partly responsible for the island's creation and continued existence. For comparison, it is estimated that other volcanic islands, such as the Faroe Islands have existed for about 55 million years, [3] the Azores (on the same ridge) about 8 million years, [4] and Hawaii less than a million years. [5] The younger rock strata in the southwest of Iceland and the central highlands are only about 700,000 years old. The geological history of the earth is divided into ice ages, based on temperature and climate. The last glacial period, commonly referred to as The Ice Age is thought to have begun about 110,000 years ago and ended about 10,000 years ago. While covered in ice, Iceland's icefalls, fjords and valleys were formed. [6]

Iceland remained, for a long time, one of the world's last uninhabited larger islands (the others being New Zealand and Madagascar). It has been suggested that the land called Thule by the Greek geographer Pytheas (fourth century BC) was actually Iceland, although it seems highly unlikely considering Pytheas' description of it as an agricultural country with plenty of milk, honey, and fruit: [7] the name is more likely to have referred to Norway, or possibly the Faroe Islands or Shetland. [8] The exact date that humans first reached the island is uncertain. Roman currency dating to the third century has been found in Iceland, but it is unknown whether they were brought there at that time or came later with Vikings after circulating for centuries. [9]

Irish monks Edit

There is some literary evidence that monks from a Hiberno-Scottish mission may have settled in Iceland before the arrival of the Norsemen. [10] The Landnámabók ("Book of Settlements"), written in the 1100s, mentions the presence of Irish monks, called the Papar, prior to Norse settlement and states that the monks left behind Irish books, bells, and crosiers, among other things. According to the same account, the Irish monks abandoned the country when the Norse arrived or had left prior to their arrival. The twelfth-century scholar Ari Þorgilsson's Íslendingabók reasserts that items including bells corresponding to those used by Irish monks were found by the settlers. No such artifacts have been discovered by archaeologists, however. Some Icelanders claimed descent from Cerball mac Dúnlainge, King of Osraige in southeastern Ireland, at the time of the Landnámabók ' s creation.

Another source mentioning the Papar is Íslendingabók, dating from between 1122 and 1133. According to this account, the previous inhabitants, a few Irish monks known as the Papar, left the island since they did not want to live with pagan Norsemen. One theory suggests that those monks were members of a Hiberno-Scottish mission, Irish and Scottish monks who spread Christianity during the Middle Ages. They may also have been hermits.

Recent archaeological excavations have revealed the ruins of a cabin in Hafnir on the Reykjanes peninsula (close to Keflavík International Airport). Carbon dating reveals that the cabin was abandoned somewhere between 770 and 880, suggesting that Iceland was populated well before 874. This archaeological find may also indicate that the monks left Iceland before the Norse arrived. [11]

Norse discovery Edit

According to the Landnámabók, Iceland was discovered by Naddodd, one of the first settlers in the Faroe Islands, who was sailing from Norway to the Faroes but lost his way and drifted to the east coast of Iceland. Naddodd called the country Snæland "Snowland". Swedish sailor Garðar Svavarsson also accidentally drifted to the coast of Iceland. He discovered that the country was an island and called it Garðarshólmi "Garðar's Islet" and stayed for the winter at Húsavík.

The first Norseman who deliberately sailed to Garðarshólmi was Hrafna-Flóki Vilgerðarson. Flóki settled for one winter at Barðaströnd. After the cold winter passed, the summer came and the whole island became green, which stunned Flóki. Realizing that this place was in fact habitable, despite the horribly cold winter, and full of useful resources, Flóki restocked his boat. He then returned east to Norway with resources and knowledge.

The first permanent settler in Iceland is usually considered to have been a Norwegian chieftain named Ingólfr Arnarson and his wife, Hallveig Fróðadóttir. According to the Landnámabók, he threw two carved pillars (Öndvegissúlur) overboard as he neared land, vowing to settle wherever they landed. He then sailed along the coast until the pillars were found in the southwestern peninsula, now known as Reykjanesskagi. There he settled with his family around 874, in a place he named Reykjavík "Smoke Cove", probably from the geothermal steam rising from the earth. This place eventually became the capital and the largest city of modern Iceland. It is recognized, however, that Ingólfr Arnarson may not have been the first one to settle permanently in Iceland—that may have been Náttfari, one of Garðar Svavarsson's men who stayed behind when Garðar returned to Scandinavia.

Much of the information on Ingólfr comes from the Landnámabók, written some three centuries after the settlement. Archeological findings in Reykjavík are consistent with the date given there: there was a settlement in Reykjavík around 870.

According to Landnámabók, Ingólfr was followed by many more Norse chieftains, their families and slaves who settled all the habitable areas of the island in the next decades. Archeological evidence strongly suggests that the timing is roughly accurate "that the whole country was occupied within a couple of decades towards the end of the 9th century." [12] These people were primarily of Norwegian, Irish, and Scottish origin. Some of the Irish and Scots were slaves and servants of the Norse chiefs, according to the sagas of Icelanders, the Landnámabók, and other documents. Some settlers coming from the British Isles were "Hiberno-Norse," with cultural and family connections both to the coastal and island areas of Ireland and/or Scotland and to Norway.

The traditional explanation for the exodus from Norway is that people were fleeing the harsh rule of the Norwegian king Harald Fairhair, whom medieval literary sources credit with the unification of some parts of modern Norway during this period. Viking incursions into Britain were also expelled thoroughly during this time, potentially leading to a need for peaceful settlement in other lands. It is also believed that the western fjords of Norway were simply overcrowded in this period.

The settlement of Iceland is thoroughly recorded in the aforementioned Landnámabók, although the book was compiled in the early 12th century when at least 200 years had passed from the age of settlement. Ari Þorgilsson's Íslendingabók is generally considered more reliable as a source and is probably somewhat older, but it is far less thorough. It does say that Iceland was fully settled within 60 years, which likely means that all arable land had been claimed by various settlers.

In 930, the ruling chiefs established an assembly called the Alþingi (Althing). The parliament convened each summer at Þingvellir, where representative chieftains (Goðorðsmenn or Goðar) amended laws, settled disputes and appointed juries to judge lawsuits. Laws were not written down but were instead memorized by an elected Lawspeaker (lǫgsǫgumaðr). The Alþingi is sometimes said to be the world's oldest existing parliament. Importantly, there was no central executive power, and therefore laws were enforced only by the people. This gave rise to feuds, which provided the writers of the sagas with plenty of material.

Iceland enjoyed a mostly uninterrupted period of growth in its commonwealth years. Settlements from that era have been found in southwest Greenland and eastern Canada, and sagas such as Saga of Erik the Red and Greenland saga speak of the settlers' exploits.

Christianisation Edit

The settlers of Iceland were predominantly pagans and worshiped the Norse gods, among them Odin, Thor, Freyr, and Freyja. By the tenth century, political pressure from Europe to convert to Christianity mounted. As the end of the first millennium grew near, many prominent Icelanders had accepted the new faith.

In the year 1000, as a civil war between the religious groups seemed likely, the Alþingi appointed one of the chieftains, Thorgeir Ljosvetningagodi, to decide the issue of religion by arbitration. He decided that the country should convert to Christianity as a whole, but that pagans would be allowed to worship privately.

The first Icelandic bishop, Ísleifur Gissurarson, was consecrated by bishop Adalbert of Hamburg in 1056.

Civil war and the end of the commonwealth Edit

During the 11th and 12th centuries, the centralization of power had worn down the institutions of the commonwealth, as the former, notable independence of local farmers and chieftains gave way to the growing power of a handful of families and their leaders. The period from around 1200 to 1262 is generally known as the Age of the Sturlungs. This refers to Sturla Þórðarson and his sons, Sighvatr Sturluson, and Snorri Sturluson, who were one of two main clans fighting for power over Iceland, causing havoc in a land inhabited almost entirely by farmers who could ill-afford to travel far from their farms, across the island to fight for their leaders.

In 1220, Snorri Sturluson became a vassal of Haakon IV of Norway his nephew Sturla Sighvatsson also became a vassal in 1235. Sturla used the power and influence of the Sturlungar family clan to wage war against the other clans in Iceland. After decades of conflict, the Icelandic chieftains agreed to accept the sovereignty of Norway and signed the Old Covenant (Gamli sáttmáli) establishing a union with the Norwegian monarchy. [13]

Norwegian rule Edit

Little changed in the decades following the treaty. Norway's consolidation of power in Iceland was slow, and the Althing intended to hold onto its legislative and judicial power. Nonetheless, the Christian clergy had unique opportunities to accumulate wealth via the tithe, and power gradually shifted to ecclesiastical authorities as Iceland's two bishops in Skálholt and Hólar acquired land at the expense of the old chieftains.

Around the time Iceland became a vassal state of Norway, a climate shift occurred—a phenomenon now called the Little Ice Age. Areas near the Arctic Circle such as Iceland and Greenland began to have shorter growing seasons and colder winters. Since Iceland had marginal farmland in good times, the climate change resulted in hardship for the population. [14] A serfdom-like institution called the vistarband developed, in which peasants were bound to landowners for a year at a time.

It became more difficult to raise barley, the primary cereal crop, and livestock required additional fodder to survive longer and colder winters. Icelanders began to trade for grain from continental Europe, which was an expensive proposition. Church fast days increased demand for dried codfish, which was easily caught and prepared for export, and the cod trade became an important part of the economy. [14]

Kalmar Union Edit

Iceland remained under Norwegian kingship until 1380, when the death of Olaf II of Denmark extinguished the Norwegian male royal line. Norway (and thus Iceland) then became part of the Kalmar Union, along with Sweden and Denmark, with Denmark as the dominant power. Unlike Norway, Denmark did not need Iceland's fish and homespun wool. This created a dramatic deficit in Iceland's trade. The small Greenland colony, established in the late 10th century, died out completely before 1500.

With the introduction of absolute monarchy in Denmark–Norway in 1660 under Frederick III of Denmark, the Icelanders relinquished their autonomy to the crown, including the right to initiate and consent to legislation. Denmark, however, did not provide much protection to Iceland, [ citation needed ] which was raided in 1627 by a Barbary pirate fleet that abducted almost 300 Icelanders into slavery, in an episode known as the Turkish Abductions.

After the end of the Kalmar Union, the royal government asserted greater control of Iceland. [13] In particular, it took stronger actions to stop the involvement of English traders with Iceland. [13]

Foreign merchants and fishermen Edit

English and German merchants became more prominent in Iceland at the start of the 15th century. [13] Some historians refer to the 15th century as the "English Age" in Iceland's history, due to the prominence of English traders and fishing fleets. [15] [16] What drew foreigners to Iceland was primarily fishing in the fruitful waters off the coast of Iceland. [15] The Icelandic trade was important to some British ports for example, in Hull, the Icelandic trade accounted for more than ten percent of Hull's total trade. [15] The trade has been credited with raising Icelandic living standards. [16] [15]

The 16th century has been referred to as the "German Age" by Icelandic historians due to the prominence of German traders. [15] The Germans did not engage in much fishing themselves, but they owned fishing boats, rented them to Icelanders and then bought the fish from Icelandic fishermen to export to the European Continent. [15]

An illicit trade continued with foreigners after the Danes implemented a trade monopoly. [15] Dutch and French traders became more prominent in the mid-17th century. [15]

Reformation and Danish trade monopoly Edit

By the middle of the 16th century, Christian III of Denmark began to impose Lutheranism on his subjects. Jón Arason and Ögmundur Pálsson, the Catholic bishops of Skálholt and Hólar respectively, opposed Christian's efforts at promoting the Protestant Reformation in Iceland. Ögmundur was deported by Danish officials in 1541, but Jón Arason put up a fight.

Opposition to the reformation ended in 1550 when Jón Arason was captured after being defeated in the Battle of Sauðafell by loyalist forces under the leadership of Daði Guðmundsson. Jón Arason and his two sons were subsequently beheaded in Skálholt. Following this, the Icelanders became Lutherans and remain largely so to this day.

In 1602, Iceland was forbidden to trade with countries other than Denmark, by order of the Danish government, which at this time pursued mercantilist policies. The Danish–Icelandic Trade Monopoly remained in effect until 1786.

The eruption of Laki Edit

In the 18th century, climatic conditions in Iceland reached an all-time low since the original settlement. On top of this, Laki erupted in 1783, spitting out 12.5 cubic kilometres (3.0 cu mi) of lava. Floods, ash, and fumes killed 9,000 people and 80% of the livestock. The ensuing starvation killed a quarter of Iceland's population. [17] This period is known as the Móðuharðindin or "Mist Hardships".

When the two kingdoms of Denmark and Norway were separated by the Treaty of Kiel in 1814 following the Napoleonic Wars, Denmark kept Iceland as a dependency.

Independence movement Edit

Throughout the 19th century, the country's climate continued to grow worse, resulting in mass emigration to the New World, particularly Manitoba in Canada. However, a new national consciousness was revived in Iceland, inspired by romantic nationalist ideas from continental Europe. This revival was spearheaded by the Fjölnismenn, a group of Danish-educated Icelandic intellectuals.

An independence movement developed under the leadership of a lawyer named Jón Sigurðsson. In 1843, a new Althing was founded as a consultative assembly. It claimed continuity with the Althing of the Icelandic Commonwealth, which had remained for centuries as a judicial body and had been abolished in 1800.

Home rule and sovereignty Edit

In 1874, a thousand years after the first acknowledged settlement, Denmark granted Iceland a constitution and home rule, which again was expanded in 1904. The constitution was revised in 1903, and a minister for Icelandic affairs, residing in Reykjavík, was made responsible to the Althing, the first of whom was Hannes Hafstein.

The Act of Union, a December 1, 1918, agreement with Denmark, recognized Iceland as a fully sovereign state—the Kingdom of Iceland—joined with Denmark in a personal union with the Danish king. [18] Iceland established its own flag. Denmark was to represent its foreign affairs and defense interests. Iceland had no military or naval forces, and Denmark was to give notice to other countries that it was permanently neutral. The act would be up for revision in 1940 and could be revoked three years later if agreement was not reached. By the 1930s the consensus in Iceland was to seek complete independence by 1944 at the latest. [19]

World War I Edit

In the quarter of a century preceding the war, Iceland had prospered. However, Iceland became more isolated during World War I and suffered a significant decline in living standards. [20] [21] The treasury became highly indebted, and there was a shortage of food and fears over an imminent famine. [20] [21] [22]

Iceland was part of neutral Denmark during the war. Icelanders were, in general, sympathetic to the cause of the Allies. Iceland also traded significantly with the United Kingdom during the war, as Iceland found itself within its sphere of influence. [23] [24] [25] In their attempts to stop the Icelanders from trading with the Germans indirectly, the British imposed costly and time-consuming constraints on Icelandic exports going to the Nordic countries. [24] [26] There is no evidence of any German plans to invade Iceland during the war. [24]

1,245 Icelanders, Icelandic Americans, and Icelandic Canadians were registered as soldiers during World War I. 989 fought for Canada, whereas 256 fought for the United States. 391 of the combatants were born in Iceland, the rest were of Icelandic descent. 10 women of Icelandic descent and 4 women born in Iceland served as nurses for the Allies during World War I. At least 144 of the combatants died during World War I (96 in combat, 19 from wounds suffered during combat, 2 from accidents, and 27 from disease), 61 of them were Iceland-born. Ten men were taken as prisoners of war by the Germans. [27]

The war had a lasting impact on Icelandic society and Iceland's external relations. It led to major government interference in the marketplace that lasted until the post-World War II period. [28] Iceland's competent governance of internal affairs and relations with other states—while relations with Denmark were interrupted during the war—showed that Iceland was capable of acquiring further powers, which resulted in Denmark recognizing Iceland as a fully sovereign state in 1918. [28] [29] It has been argued that the thirst for news of the war helped Morgunblaðið to gain a dominant position among Icelandic newspapers. [30]

The Great Depression Edit

Icelandic post-World War I prosperity came to an end with the outbreak of the Great Depression, a severe worldwide economic crash. The depression hit Iceland hard as the value of exports plummeted. The total value of Icelandic exports fell from 74 million kronur in 1929 to 48 million kronur in 1932, and did not rise again to the pre-1930 level until after 1939. [31] Government interference in the economy increased: "Imports were regulated, trade with foreign currency was monopolized by state-owned banks, and loan capital was largely distributed by state-regulated funds". [31] The outbreak of the Spanish Civil War cut Iceland's exports of saltfish by half, and the depression lasted in Iceland until the outbreak of World War II, when prices for fish exports soared. [31]

World War II Edit

With war looming in the spring of 1939, Iceland realized its exposed position would be very dangerous in wartime. An all-party government was formed, and Lufthansa's request for civilian airplane landing rights was rejected. German ships were all about, however, until the British blockade of Germany put a stop to that when the war began in September. Iceland demanded Britain allow it to trade with Germany, to no avail. [32]

The occupation of Denmark by Nazi Germany began on 9 April 1940, severing communications between Iceland and Denmark. [33] As a result, on 10 April, the Parliament of Iceland took temporary control of foreign affairs (setting up what would be the forerunner of the Ministry for Foreign Affairs) and the Coast Guard. [34] Parliament also elected a provisional governor, Sveinn Björnsson, who later became the Republic's first president. Iceland became de facto fully sovereign with these actions. [34] At the time, Icelanders and the Danish King considered this state of affairs to be temporary and believed that Iceland would return these powers to Denmark when the occupation was over. [34]

Iceland turned down British offers of protection after the occupation of Denmark, because that would violate Iceland's neutrality. Britain and the U.S. opened direct diplomatic relations, as did Sweden and Norway. The German takeover of Norway left Iceland highly exposed Britain decided it could not risk a German takeover of Iceland. On 10 May 1940, British military forces began an invasion of Iceland when they sailed into Reykjavík harbour in Operation Fork. There was no resistance, but the government protested against what it called a "flagrant violation" of Icelandic neutrality, though Prime Minister Hermann Jónasson called on Icelanders to treat the British troops with politeness, as if they were guests. [33] They behaved accordingly, and there were no mishaps. The occupation of Iceland lasted throughout the war. [35]

At the peak, the British had 25,000 troops stationed in Iceland, [33] all but eliminating unemployment in the Reykjavík area and other strategically important places. In July 1941, responsibility for Iceland's occupation and defence passed to the United States under a U.S.-Icelandic agreement which included a provision that the U.S. recognize Iceland's absolute independence. The British were replaced by up to 40,000 Americans, who outnumbered all adult Icelandic men. (At the time, Iceland had a population of around 120,000.) [36]

Approximately 159 Icelanders' lives have been confirmed to have been lost in World War II hostilities. [37] Most were killed on cargo and fishing vessels sunk by German aircraft, U-boats or mines. [37] [38] An additional 70 Icelanders died at sea, but it has not been confirmed whether they lost their lives as a result of hostilities. [37] [38]

The occupation of Iceland by the British and the Americans proved to be an economic boom, as the occupiers injected money into the Icelandic economy and launched various projects. This eradicated unemployment in Iceland and raised wages considerably. [39] [40] According to one study, "by the end of World War II, Iceland had been transformed from one of Europe’s poorest countries to one of the world’s wealthiest." [39]

Founding of the republic Edit

On 31 December 1943, the Act of Union agreement expired after 25 years. Beginning on 20 May 1944, Icelanders voted in a four-day plebiscite on whether to terminate the personal union with the King of Denmark and establish a republic. The vote was 97% in favour of ending the union and 95% in favour of the new republican constitution. [41] Iceland became an independent republic on 17 June 1944, with Sveinn Björnsson as its first president. Denmark was still occupied by Germany at the time. Danish King Christian X sent a message of congratulations to the Icelandic people.

Iceland had prospered during the course of the war, amassing considerable currency reserves in foreign banks. In addition to this, the country received the most Marshall Aid per capita of any European country in the immediate postwar years (at US$209, with the war-ravaged Netherlands a distant second at US$109). [42] [43]

The new republican government, led by an unlikely three-party majority cabinet made up of conservatives (the Independence Party, Sjálfstæðisflokkurinn), social democrats (the Social Democratic Party, Alþýðuflokkurinn), and socialists (People's Unity Party – Socialist Party, Sósíalistaflokkurinn), decided to put the funds into a general renovation of the fishing fleet, the building of fish processing facilities, the construction of a cement and fertilizer factory, and a general modernization of agriculture. These actions were aimed at keeping Icelanders' standard of living as high as it had become during the prosperous war years. [44]

The government's fiscal policy was strictly Keynesian, and their aim was to create the necessary industrial infrastructure for a prosperous developed country. It was considered essential to keep unemployment down and to protect the export fishing industry through currency manipulation and other means. Because of the country's dependence both on reliable fish catches and foreign demand for fish products, Iceland's economy remained unstable well into the 1990s, when the country's economy was greatly diversified.

NATO membership, US defense agreement, and the Cold War Edit

In October 1946, the Icelandic and United States governments agreed to terminate U.S. responsibility for the defense of Iceland, but the United States retained certain rights at Keflavík, such as the right to re-establish a military presence there, should war threaten.

Iceland became a charter member of the North Atlantic Treaty Organization (NATO) on 30 March 1949, with the reservation that it would never take part in offensive action against another nation. The membership came amid an anti-NATO riot in Iceland. After the outbreak of the Korean War in 1950, and pursuant to the request of NATO military authorities, the United States and Iceland agreed that the United States should again take responsibility for Iceland's defense. This agreement, signed on 5 May 1951, was the authority for the controversial U.S. military presence in Iceland, which remained until 2006. The U.S. base served as a hub for transports and communications to Europe, a key chain in the GIUK gap, a monitor of Soviet submarine activity, and a linchpin in the early warning system for incoming Soviet attacks and interceptor of Soviet reconnaissance bombers. [45] Although U.S. forces no longer maintain a military presence in Iceland, the U.S. still assumes responsibility over the country's defense through NATO. Iceland has retained strong ties to the other Nordic countries. As a consequence, Norway, Denmark, Germany, and other European nations have increased their defense and rescue cooperation with Iceland since the withdrawal of U.S. forces.

According to a 2018 study in the Scandinavian Journal of History, Iceland benefited massively from its relationship with the United States during the Cold War. The United States provided extensive economic patronage, advocated on Iceland's behalf in international organizations, allowed Iceland to violate the rules of international organizations, and helped Iceland to victory in the Cod Wars. [39] Despite this, the relationship with the United States was contentious in Icelandic domestic politics, leaving some scholars to describe Iceland as a "rebellious ally" and "reluctant ally." [46] [47] Iceland repeatedly threatened to leave NATO or cancel the US defence agreement during the Cold War, which is one reason why the United States went to great lengths to please the Icelanders. [46] [48]

Cod Wars Edit

The Cod Wars were a series of militarized interstate disputes between Iceland and the United Kingdom from the 1950s to the mid-1970s. The Proto Cod War (1952–1956) revolved around Iceland's extension of its fishery limits from 3 to 4 nautical miles. The First Cod War (1958–1961) was fought over Iceland's extension from 4 to 12 nautical miles (7 to 22 km). The Second Cod War (1972–1973) occurred when Iceland extended the limits to 50 miles (93 km). The Third Cod War (1975–1976) was fought over Iceland's extension of its fishery limits to 200 miles (370 km). Icelandic patrol ships and British trawlers clashed in all four Cod Wars. The Royal Navy was sent to the contested waters in the last three Cod Wars, leading to highly publicized clashes. [49] [50] [51]

During these disputes, Iceland threatened closure of the U.S. base at Keflavík, and the withdrawal of its NATO membership. Due to Iceland's strategic importance during the Cold War, it was important for the U.S. and NATO to maintain the base on Icelandic soil and to keep Iceland as a member of NATO. While the Icelandic government did follow through on its threat to break off diplomatic relations with the UK during the Third Cod War, it never went through on its threats to close the U.S. base or to withdraw from NATO. [49] [50] [51]

It is rare for militarized interstate disputes of this magnitude and intensity to occur between two democracies with as close economic, cultural, and institutional ties as Iceland and the UK. [51] [52]

EEA membership and economic reform Edit

In 1991, the Independence Party, led by Davíð Oddsson, formed a coalition government with the Social Democrats. This government set in motion market liberalisation policies, privatising a number of state-owned companies. Iceland then became a member of the European Economic Area in 1994. Economic stability increased and previously chronic inflation was drastically reduced.

In 1995, the Independence Party formed a coalition government with the Progressive Party. This government continued with free market policies, privatising two commercial banks and the state-owned telecom Landssíminn. Corporate income tax was reduced to 18% (from around 50% at the beginning of the decade), inheritance tax was greatly reduced, and the net wealth tax was abolished. A system of individual transferable quotas in the Icelandic fisheries, first introduced in the late 1970s, was further developed. The coalition government remained in power through elections in 1999 and 2003. In 2004, Davíð Oddsson stepped down as Prime Minister after 13 years in office. Halldór Ásgrímsson, leader of the Progressive Party, took over as prime minister from 2004 to 2006, followed by Geir H. Haarde, Davíð Oddsson's successor as leader of the Independence Party.

Following a recession in the early 1990s, economic growth was considerable, averaging about 4% per year from 1994. The governments of the 1990s and 2000s adhered to a staunch but domestically controversial pro-U.S. foreign policy, lending nominal support to the NATO action in the Kosovo War and signing up as a member of the Coalition of the willing during the 2003 invasion of Iraq.

In March 2006, the United States announced that it intended to withdraw the greater part of the Icelandic Defence Force. On 12 August 2006, the last four F-15's left Icelandic airspace. The United States closed the Keflavík Air Base in September 2006. In 2016, it was reported that the United States was considering re-opening the base. [53]

Following elections in May 2007, the Independence Party, headed by Haarde, remained in government, albeit in a new coalition with the Social Democratic Alliance.

Financial crisis Edit

In October 2008, the Icelandic banking system collapsed, prompting Iceland to seek large loans from the International Monetary Fund and friendly countries. Widespread protests in late 2008 and early 2009 resulted in the resignation of the Haarde government, which was replaced on 1 February 2009 by a coalition government led by the Social Democratic Alliance and the Left-Green Movement. Social Democrat minister Jóhanna Sigurðardóttir was appointed Prime Minister, becoming the world's first openly homosexual head of government of the modern era. [54] [55] Elections took place in April 2009, and a continuing coalition government consisting of the Social Democrats and the Left-Green Movement was established in May 2009.

The financial crisis gave rise to the Icesave dispute, where Iceland on the one hand and the United Kingdom and Netherlands on the other disputed whether Iceland was obligated to repay British and Dutch depositors who lost their savings when Icesave collapsed. [56]

The crisis resulted in the greatest migration from Iceland since 1887, with a net exodus of 5,000 people in 2009. [57] Iceland's economy stabilized under the government of Jóhanna Sigurðardóttir, and grew by 1.6% in 2012, [58] [59] but many Icelanders remained unhappy with the state of the economy and government austerity policies the centre-right Independence Party was returned to power, in coalition with the Progressive Party, in the 2013 elections.

On 1 August 2016, Guðni Th. Jóhannesson became the new president of Iceland.

Division of history into named periods Edit

While it is convenient to divide history into named periods, it is also misleading because the course of human events neither starts nor ends abruptly in most cases, and movements and influences often overlap. One period in Icelandic history, as Gunnar Karlsson describes, can be considered the period from 930 CE to 1262–1264, when there was no central government or leader, political power being characterised by chieftains ("goðar"). This period is referred to therefore as the þjóðveldisöld or goðaveldisöld (National or Chieftain State) period by Icelandic authors, and the Old Commonwealth or Freestate by English ones.

There is little consensus on how to divide Icelandic history. Gunnar's own book A Brief History of Iceland (2010) has 33 chapters with considerable overlap in dates. Jón J. Aðils' 1915 text, Íslandssaga (A History of Iceland) uses ten periods:

  • Landnámsöld (Settlement Age) c. 870–930
  • Söguöld (Saga Age) 930–1030
  • Íslenska kirkjan í elstu tíð (The early Icelandic church) 1030–1152
  • Sturlungaöld (Sturlung Age) 1152–1262
  • Ísland undir stjórn Noregskonunga og uppgangur kennimanna (Norwegian royal rule and the rise of the clergy) 1262–1400
  • Kirkjuvald (Ecclesiastical power) 1400–1550
  • Konungsvald (Royal authority) 1550–1683
  • Einveldi og einokun (Absolutism and monopoly trading) 1683–1800
  • Viðreisnarbarátta (Campaign for restoration [of past glories]) 1801–1874
  • Framsókn (Progress) 1875–1915

In another of Gunnar's books, Iceland's 1100 Years (2000), Icelandic history is divided into four periods:

  • Colonisation and Commonwealth c. 870–1262
  • Under foreign rule 1262 – c. 1800
  • A primitive society builds a state 1809–1918
  • The great 20th-century transformation

These are based mainly on forms of government, except for the last which reflects mechanisation of the fishing industry. [60]

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