Iceland

—Icelander /uys"lan'deuhr, -leuhn deuhr/, n.

/uys"leuhnd/, n.

1. a large island in the N Atlantic between Greenland and Scandinavia. 39,698 sq. mi. (102,820 sq. km).

2. a republic including this island and several smaller islands: formerly Danish; independent since 1944. 272,550. Cap.: Reykjavik.

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Iceland

Introduction Iceland
Background: Settled by Norwegian and Celtic (Scottish and Irish) immigrants during the late 9th and 10th centuries A.D., Iceland boasts the world's oldest functioning legislative assembly, the Althing, established in 930. Independent for over 300 years, Iceland was subsequently ruled by Norway and Denmark. Fallout from the Askja volcano of 1875 devastated the Icelandic economy and caused widespread famine. Over the next quarter century, 20% of the island's population emigrated, mostly to Canada and the US. Limited home rule from Denmark was granted in 1874 and complete independence attained in 1944. Literacy, longevity, income, and social cohesion are first-rate by world standards. Geography Iceland -
Location: Northern Europe, island between the Greenland Sea and the North Atlantic Ocean, northwest of the UK
Geographic coordinates: 65 00 N, 18 00 W
Map references: Arctic Region
Area: total: 103,000 sq km water: 2,750 sq km land: 100,250 sq km
Area - comparative: slightly smaller than Kentucky
Land boundaries: 0 km
Coastline: 4,988 km
Maritime claims: continental shelf: 200 NM or to the edge of the continental margin territorial sea: 12 NM exclusive economic zone: 200 NM
Climate: temperate; moderated by North Atlantic Current; mild, windy winters; damp, cool summers
Terrain: mostly plateau interspersed with mountain peaks, icefields; coast deeply indented by bays and fiords
Elevation extremes: lowest point: Atlantic Ocean 0 m highest point: Hvannadalshnukur 2,119 m
Natural resources: fish, hydropower, geothermal power, diatomite
Land use: arable land: 0.06% NEGL permanent crops: 0% other: 99.94% (23% permanent pastures) (1998 est.)
Irrigated land: NA sq km
Natural hazards: earthquakes and volcanic activity Environment - current issues: water pollution from fertilizer runoff; inadequate wastewater treatment Environment - international party to: Air Pollution,
agreements: Biodiversity, Climate Change, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Marine Dumping, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Wetlands signed, but not ratified: Air Pollution-Persistent Organic Pollutants, Environmental Modification, Marine Life Conservation
Geography - note: strategic location between Greenland and Europe; westernmost European country; Reykjavik is the northernmost national capital in the world; more land covered by glaciers than in all of continental Europe People Iceland
Population: 279,384 (July 2002 est.)
Age structure: 0-14 years: 23% (male 33,189; female 31,155) 15-64 years: 65.1% (male 91,704; female 90,199) 65 years and over: 11.9% (male 14,828; female 18,309) (2002 est.)
Population growth rate: 0.52% (2002 est.)
Birth rate: 14.37 births/1,000 population (2002 est.)
Death rate: 6.93 deaths/1,000 population (2002 est.)
Net migration rate: -2.27 migrant(s)/1,000 population (2002 est.)
Sex ratio: at birth: 1.08 male(s)/female under 15 years: 1.07 male(s)/female 15-64 years: 1.02 male(s)/female 65 years and over: 0.81 male(s)/ female total population: 1 male(s)/female (2002 est.)
Infant mortality rate: 3.53 deaths/1,000 live births (2002 est.) Life expectancy at birth: total population: 79.66 years female: 82.07 years (2002 est.) male: 77.42 years
Total fertility rate: 1.99 children born/woman (2002 est.) HIV/AIDS - adult prevalence rate: 0.14% (1999 est.) HIV/AIDS - people living with HIV/ 200 (1999 est.)
AIDS:
HIV/AIDS - deaths: less than 100 (1999 est.)
Nationality: noun: Icelander(s) adjective: Icelandic
Ethnic groups: homogeneous mixture of descendants of Norse and Celts
Religions: Evangelical Lutheran 93%, other Protestant and Roman Catholic, none (1997)
Languages: Icelandic
Literacy: definition: age 15 and over can read and write total population: 99.9% (1997 est.) male: NA% female: NA% Government Iceland
Country name: conventional long form: Republic of Iceland conventional short form: Iceland local short form: Island local long form: Lydhveldidh Island
Government type: constitutional republic
Capital: Reykjavik Administrative divisions: 23 counties (syslar, singular - sysla) and 14 independent towns* (kaupstadhir, singular - kaupstadhur); Akranes*, Akureyri*, Arnessysla, Austur- Bardhastrandarsysla, Austur- Hunavatnssysla, Austur- Skaftafellssysla, Borgarfjardharsysla, Dalasysla, Eyjafjardharsysla, Gullbringusysla, Hafnarfjordhur*, Husavik*, Isafjordhur*, Keflavik*, Kjosarsysla, Kopavogur*, Myrasysla, Neskaupstadhur*, Nordhur- Isafjardharsysla, Nordhur-Mulasys- la, Nordhur-Thingeyjarsysla, Olafsfjordhur*, Rangarvallasysla, Reykjavik*, Saudharkrokur*, Seydhisfjordhur*, Siglufjordhur*, Skagafjardharsysla, Snaefellsnes-og Hnappadalssysla, Strandasysla, Sudhur-Mulasysla, Sudhur- Thingeyjarsysla, Vesttmannaeyjar*, Vestur-Bardhastrandarsysla, Vestur- Hunavatnssysla, Vestur- Isafjardharsysla, Vestur- Skaftafellssysla note: there may be four other counties
Independence: 17 June 1944 (from Denmark)
National holiday: Independence Day, 17 June (1944)
Constitution: 16 June 1944, effective 17 June 1944
Legal system: civil law system based on Danish law; has not accepted compulsory ICJ jurisdiction
Suffrage: 18 years of age; universal
Executive branch: chief of state: President Olafur Ragnar GRIMSSON (since 1 August 1996) head of government: Prime Minister David ODDSSON (since 30 April 1991) cabinet: Cabinet appointed by the prime minister and approved by Parliament election results: Olafur Ragnar GRIMSSON ran unopposed in 2000 and was reelected elections: president elected by popular vote for a four-year term; election last held 29 June 1996 (next to be held NA June 2004); President GRIMSSON ran unopposed in June 2000 so there were no elections; prime minister appointed by the president
Legislative branch: unicameral Parliament or Althing (63 seats; members are elected by popular vote to serve four-year terms) election results: percent of vote by party - Independence Party 40.7%, The Alliance (PA, People's Party, Women's List) 26.8%, Progressive Party 18.4%, Left-Green Alliance 9.1%, Liberal Party 4.2%; seats by party - Independence Party 26, The Alliance 17, Progressive Party 12, Left-Green Alliance 6, Liberal Party 2 elections: last held 8 May 1999 (next to be held by April 2003)
Judicial branch: Supreme Court or Haestirettur (justices are appointed for life by the president) Political parties and leaders: Independence Party (conservative) or IP [David ODDSSON]; Left-Green Alliance [Steingrimur SIGFUSSON]; Liberal Party [Sverrir HERMANNSSON]; People's Party (Social Democratic Party) or SDP [Sighvatur BJORGVINSSON]; Progressive Party (liberal) or PP [Halldor ASGRIMSSON]; The Alliance (includes People's Alliance or PA, Social Democratic Party or SVP, People's Movement, Women's List) [Ossur SKARPHEDINSSON]; Women's List or WL [Kristin ASTGEIRSDOTTIR] Political pressure groups and NA
leaders: International organization Australia Group, BIS, CBSS, CCC, CE,
participation: EAPC, EBRD, ECE, EFTA, FAO, IAEA, IBRD, ICAO, ICC, ICFTU, ICRM, IDA, IEA (observer), IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO, Interpol, IOC, ISO, ITU, NATO, NC, NEA, NIB, OECD, OPCW, OSCE, PCA, UN, UNCTAD, UNESCO, UNMIBH, UNMIK, UNU, UPU, WEU (associate), WHO, WIPO, WMO, WTrO Diplomatic representation in the US: chief of mission: Ambassador Jon- Baldvin HANNIBALSSON chancery: Suite 1200, 1156 15th Street NW, Washington, DC 20005-1704 consulate(s) general: New York FAX: [1] [phone] telephone: [1] [phone] Diplomatic representation from the chief of mission: Ambassador Barbara
US: J. GRIFFITHS embassy: Laufasvegur 21, 101 Reykjavik mailing address: US Embassy, PSC 1003, Box 40, FPO AE 09728-0340 telephone: [354] 5629100 FAX: [354] 5629123
Flag description: blue with a red cross outlined in white extending to the edges of the flag; the vertical part of the cross is shifted to the hoist side in the style of the Dannebrog (Danish flag) Economy Iceland -
Economy - overview: Iceland's Scandinavian-type economy is basically capitalistic, yet with an extensive welfare system, low unemployment, and remarkably even distribution of income. In the absence of other natural resources (except for abundant hydrothermal and geothermal power), the economy depends heavily on the fishing industry, providing 70% of export earnings and employing 12% of the work force. The economy remains sensitive to declining fish stocks as well as to drops in world prices for its main exports: fish and fish products, aluminum, and ferrosilicon. The center-right government plans to continue its policies of reducing the budget and current account deficits, limiting foreign borrowing, containing inflation, revising agricultural and fishing policies, diversifying the economy, and privatizing state-owned industries. The government remains opposed to EU membership, primarily because of Icelanders' concern about losing control over their fishing resources. Iceland's economy has been diversifying into manufacturing and service industries in the last decade, and new developments in software production, biotechnology, and financial services are taking place. The tourism sector is also expanding, with the recent trends in ecotourism and whale watching. Growth has been remarkably steady over the past five years at 4%-5%.
GDP: purchasing power parity - $6.85 billion (2000 est.)
GDP - real growth rate: 4.3% (2000 est.)
GDP - per capita: purchasing power parity - $24,800 (2000 est.) GDP - composition by sector: agriculture: 15% (includes fishing 13%) industry: 21% services: 64% (1999 est.) Population below poverty line: NA% Household income or consumption by lowest 10%: NA%
percentage share: highest 10%: NA% Inflation rate (consumer prices): 3.5% (2000 est.)
Labor force: 159,000 (2000) Labor force - by occupation: agriculture 5.1%, fishing and fish processing 11.8%, manufacturing 12.9%, construction 10.7%, other services 59.5% (1999)
Unemployment rate: 1% (April 2001 est.)
Budget: revenues: $3.5 billion expenditures: $3.3 billion, including capital expenditures of $467 million (1999)
Industries: fish processing; aluminum smelting, ferrosilicon production, geothermal power; tourism Industrial production growth rate: 1.5% (2000 est.) Electricity - production: 7.549 billion kWh (2000) Electricity - production by source: fossil fuel: 0.05% hydro: 83.3% other: 16.65% (2000) nuclear: 0% Electricity - consumption: 7.02 billion kWh (2000)
Electricity - exports: 0 kWh (2000)
Electricity - imports: 0 kWh (2000)
Agriculture - products: potatoes, turnips; cattle, sheep; fish
Exports: $2 billion (f.o.b., 2000)
Exports - commodities: fish and fish products 70%, animal products, aluminum, diatomite, ferrosilicon
Exports - partners: EU 64% (UK 20%, Germany 13%, France 5%, Denmark 5%), US 15%, Japan 5% (1999)
Imports: $2.2 billion (f.o.b., 2000)
Imports - commodities: machinery and equipment, petroleum products; foodstuffs, textiles
Imports - partners: EU 56% (Germany 12%, UK 9%, Denmark 8%, Sweden 6%), US 11%, Norway 10% (1999)
Debt - external: $2.6 billion (1999)
Economic aid - donor: $NA
Currency: Icelandic krona (ISK)
Currency code: ISK
Exchange rates: Icelandic kronur per US dollar - 102.430 (January 2002), 97.425 (2001), 78.616 (2000), 72.335 (1999), 70.958 (1998), 70.904 (1997)
Fiscal year: calendar year Communications Iceland Telephones - main lines in use: 168,000 (1997) Telephones - mobile cellular: 65,746 (1997)
Telephone system: general assessment: adequate domestic service domestic: the trunk network consists of coaxial and fiber-optic cables and microwave radio relay links international: satellite earth stations - 2 Intelsat (Atlantic Ocean), 1 Inmarsat (Atlantic and Indian Ocean regions); note - Iceland shares the Inmarsat earth station with the other Nordic countries (Denmark, Finland, Norway, and Sweden) Radio broadcast stations: AM 3, FM about 70 (including repeaters), shortwave 1 (1998)
Radios: 260,000 (1997) Television broadcast stations: 14 (plus 156 low-power repeaters) (1997)
Televisions: 98,000 (1997)
Internet country code: .is Internet Service Providers (ISPs): 7 (2000)
Internet users: 168,000 (2001) Transportation Iceland
Railways: 0 km
Highways: total: 12,691 km paved: 3,262 km unpaved: 9,429 km (1999)
Waterways: none
Ports and harbors: Akureyri, Hornafjordhur, Isafjordhur, Keflavik, Raufarhofn, Reykjavik, Seydhisfjordhur, Straumsvik, Vesttmannaeyjar
Merchant marine: total: 1 ship (1,000 GRT or over) totaling 1,816 GRT/2,500 DWT ships by type: chemical tanker 1 (2002 est.)
Airports: 86 (2001) Airports - with paved runways: total: 13 over 3,047 m: 1 1,524 to 2,437 m: 4 914 to 1,523 m: 8 (2001) Airports - with unpaved runways: total: 73 1,524 to 2,437 m: 3 914 to 1,523 m: 21 under 914 m: 49 (2001) Military Iceland
Military branches: no regular armed forces; Police, Coast Guard Military manpower - availability: males age 15-49: 71,142 (2002 est.) Military manpower - fit for military males age 15-49: 62,556 (2002 est.)
service: Military expenditures - dollar $0
figure:
Military - note: defense is provided by the US-manned Icelandic Defense Force (IDF) headquartered at Keflavik Transnational Issues Iceland Disputes - international: Rockall continental shelf dispute involving Denmark, Iceland, and the UK (Ireland and the UK have signed a boundary agreement in the Rockall area); dispute with Denmark over the Faroe Islands' fisheries median line boundary within 200 NM; disputes with Denmark, the UK, and Ireland over the Faroe Islands continental shelf boundary outside 200 NM

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officially Republic of Iceland

Island country, northern Atlantic Ocean, between Norway and Greenland.

Area: 39,699 sq mi (102,819 sq km). Population (2002 est.): 288,000. Capital: Reykjavík. The people are overwhelmingly Nordic. Language: Icelandic (official). Religion: Evangelical Lutheranism (official). Currency: króna. One of the most active volcanic regions in the world, Iceland contains about 200 volcanoes and accounts for one-third of the Earth's total lava flow. One-tenth of its area is covered by cooled lava beds and glaciers, including Vatnajökull. Its rugged coastline is 3,700 mi (6,000 km) long. The economy is based heavily on fishing and fish products but also includes hydropower production, livestock, and aluminum processing. Iceland is a republic with one legislative house; its chief of state is the president, and the head of government is the prime minister. Iceland was settled by Norwegian seafarers in the 9th century and was Christianized by 1000. Its legislature, the Althingi, was founded in 930, making it one of the oldest legislative assemblies in the world. Iceland united with Norway in 1262 and with Denmark in 1380. It became an independent state of Denmark in 1918, but it severed those ties to become an independent republic in 1944. Vigdís Finnbogadóttir became the world's first female elected president in 1980.

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▪ 2009

Area:

103,000 sq km (39,769 sq mi)

Population

(2008 est.): 315,000

Capital:

Reykjavík

Chief of state:

President Ólafur Ragnar Grímsson

Head of government:

Prime Minister Geir H. Haarde

      Iceland's economy went through a period of extreme turbulence in 2008. The country's currency slipped sharply, with the exchange rate plunging by year's end to more than 119 krónur to the dollar, compared with 62 krónur at the beginning of the year. The main cause was the persistent deficit on the current account of the balance of payments, which stood at 15–16% of GDP in both 2007 and 2008. High domestic interest rates attracted speculative international issues of krónur bonds that overappreciated the exchange rate, causing a commensurate currency depreciation when many such bond issues matured during the year. Following several years of rapid expansion, the economy slowed to basically zero growth in 2008. At the same time, the depreciation of the currency accelerated inflation to 15%, the highest annual rate in more than a decade.

      The rapid growth in the Icelandic banking system had brought its total balance sheet to about nine times Iceland's GDP. This called into question the ability of the central bank to act as a lender of last resort to the banking system. In May the central banks of Norway, Sweden, and Denmark formed a currency-swap agreement with the central bank for €500 million (about $778 million) each. These difficulties were exacerbated by the turmoil in international financial markets that culminated in October. As Iceland was running out of foreign currency, the British government seized the assets of Icelandic banks in the U.K. The Icelandic government took over the country's three largest banks; foreign-currency trading was halted; and the stock market was suspended. In early November the IMF loaned $2 billion to Iceland, followed by assistance from several other European countries.

      Despite these problems, longer-term prospects remained good. Iceland possessed abundant hydropower and geothermal resources, and international demand for clean energy was attracting many foreign investors to the country to make use of these resources. Two major aluminum smelters were on the drawing board, and other energy-intensive industries were looking for development opportunities. The Icelandic government was in the process of opening for bids for oil exploration licenses in the Dreki, or Dragon, area northeast of Iceland.

Björn Matthíasson

▪ 2008

Area:

102,928 sq km (39,741 sq mi)

Population

(2007 est.): 310,000

Capital:

Reykjavík

Chief of state:

President Ólafur Ragnar Grímsson

Head of government:

Prime Minister Geir H. Haarde

       Elections to Iceland's Althingi (parliament) were held in May 2007. The incumbent government coalition, made up of the Independence Party and the Progressive Party, barely survived with a majority of one vote in the 63-member body. Because this majority was considered too slim, the leader of the Independence Party, Prime Minister Geir H. Haarde, decided to form a new coalition with the Social Democrats, giving his new government a majority with 43 votes.

      Iceland's economy began to slow down in the course of 2007, following the vigorous pace of growth of the previous several years. The Kárahnjúkar 690-MW hydropower station in the northeastern part of the country was completed and began supplying power to the Alcoa aluminum plant at Reyðarfjörður. The construction of the power station provoked a bitter debate in the country on the use of natural resources, damage to the environment, and the future plans for additional power projects and aluminum plants. The proposal for a planned expansion of an Alcan plant near Hafnarfjörður, a suburb of Reykjavík, was put to a municipal referendum and was narrowly defeated. In his New Year address on January 1, Pres. Ólafur Ragnar Grímsson (Grimsson, Olafur Ragnar ) called on Iceland to “become a centre of international collaboration and discussion on clean energy.”

      Iceland's currency, the króna, had gradually come under scrutiny for being too weak and subject to exchange rate fluctuations. During 2005–06 Iceland's basic interest rate was hiked from 5.3%to 13%, a move that attracted large foreign króna-denominated bond issues and thereby further destabilized the currency. This instability led to a debate on whether Iceland would be better off adopting the euro.

      The stock of codfish in Icelandic waters had diminished over the years, despite stringent efforts to manage the catch. In 2006 the authorities concluded that the catch would have to be cut by 63,000 tons per year for the next two years, limiting the annual catch to 130,000 tons. Since cod was the most valuable species in the entire fish catch, the cut would have a serious effect on many fishing villages around the coast.

 On October 9 Japanese American artist Yoko Ono inaugurated the Imagine Peace Tower on the island of Videy, near Reykjavík, in memory of her late husband, British singer John Lennon. The memorial was designed to shine a beacon of light into the sky every year from October 9 (Lennon's birth date) until December 8 (the date of his death in 1980).

Björn Matthíasson

▪ 2007

Area:

102,928 sq km (39,741 sq mi)

Population

(2006 est.): 302,000

Capital:

Reykjavík

Chief of state:

President Ólafur Ragnar Grímsson

Head of government:

Prime Ministers Halldór Ásgrímsson and, from June 15, Geir H. Haarde

      Iceland's economy continued to grow at a rapid pace in 2006, reaching an estimated rate of 4¹/₂%. This brisk increase followed two earlier years of 7¹/₂% growth per annum. The healthy gain was mainly based on investment in a 690-MW hydropower project at Kárahnjúkar, in the northeastern mountain region, and an aluminum plant built by Alcoa at Reyðarfjörður on the east coast. These two projects cost $3 billion–$3.5 billion over the construction period of three years and were to be completed in 2007, by which time the economy was expected to have slowed down. By February 2006 the exchange rate and share prices had fallen sharply in the wake of overheating of the economy and turbulence in the currency market. Share prices, however, recovered their loss in the latter half of the year.

      In municipal elections in late May, the Progressive Party of Prime Minister Halldór Ásgrímsson lost much support, which led Ásgrímsson to resign on June 15. He was succeeded by Geir H. Haarde, the chairman of the Independence Party. Elections to the Althingi (parliament) were scheduled for May 2007.

      On March 15 the U.S. government informed the Icelandic authorities that it intended to close down the military base at Keflavík in the next six months. This U.S. base had been in Iceland since 1951, but with the disappearance of the Soviet threat and the end of the Cold War, it was no longer seen as needed. Although the base was fully closed by late September, the U.S. was still formally committed to defending Iceland under NATO auspices. In defiance of an international ban, Iceland resumed whaling in October, after a two-decade halt.

Björn Matthíasson

▪ 2006

Area:

102,928 sq km (39,741 sq mi)

Population

(2005 est.): 295,000

Capital:

Reykjavík

Chief of state:

President Ólafur Ragnar Grímsson

Head of government:

Prime Minister Halldór Ásgrímsson

      Iceland's economy continued its brisk expansion in 2005, with GDP growth exceeding 6%, the second year of such a high growth rate. The source of this expansion was the ongoing construction of a 690-MW hydropower project and a huge aluminum plant in the northeastern part of the country, both scheduled for completion in 2006–07. The GDP growth rate for 2006 was expected to be 4¹/₂–5%, although the economy was expected to cool down upon completion of the construction projects.

      Several Icelandic companies embarked upon a series of takeovers abroad, notably the food and apparel retailer Baugur Group, which was aggressively buying British and Scandinavian retail firms, including a number of well-known names in the fashion industry. The head of the group, Jón Ásgeir Jóhannesson, was indicted in 2005 for illegally using company funds and for accounting irregularities. In the first round of litigation, the court rejected many of the charges on the grounds of insufficient preparation. The government later revised the charges for another indictment. FL Group, the owner of Icelandair, was an active investor in the U.K.-based EasyJet and also acquired Sterling Airways, a Danish low-cost carrier.

      On September 27 former prime minister David Oddsson resigned his post as foreign minister to become the head of the central bank. He also stepped aside as chairman of the Independence Party in favour of Geir H. Haarde, who had been finance minister since 1998 and was succeeding Oddsson at the Foreign Ministry.

      In recent years the U.S. had indicated that it would like to withdraw from its air base at Keflavík (established in 1951) or maintain only a minimal presence there. The Icelandic government had urged the U.S. to stay, both because the base provided employment and because Iceland had no domestic defense force. In late 2005 negotiations for the future of the base seemed to have broken down, apparently over the issue of cost-sharing.

Björn Matthíasson

▪ 2005

Area:

102,928 sq km (39,741 sq mi)

Population

(2004 est.): 292,000

Capital:

Reykjavík

Chief of state:

President Ólafur Ragnar Grímsson

Head of government:

Prime Ministers Davíd Oddsson and, from September 15, Halldór Ásgrímsson

      Iceland's economy expanded at a brisk pace in 2004, with GDP growing at a rate of 5%, following 4¹/₂% growth in the previous year. Inflation edged up slightly, to an annual rate of 3–4%. The rapid growth was primarily due to the ongoing construction project in the northeastern part of the country, where a 690-MW hydropower station was being built to provide electricity to an Alcoa aluminum plant. Together these two construction projects, which were scheduled for completion in 2006, would cost $3 billion, almost one-fourth of Iceland's normal annual GDP.

      In the spring the government proposed legislation that sought to limit radio and television ownership to companies devoted solely to electronic media. Firms engaged in other lines could own only a 5% stake in broadcast media companies. The intention was to limit the opinion-shaping power of multi-industry companies. The bill was fiercely controversial but was eventually passed by the Althingi (parliament). Pres. Ólafur Ragnar Grímsson, however, refused to sign the law—the first time in the 60-year history of the Republic of Iceland that a president had exercised his veto power. Under the constitution the law still remained in force but had to be put before a national referendum. Rather than risk defeat, the government, in a special parliamentary summer session, rescinded the law.

      On Sept. 15, 2004, Iceland's prime minister since 1991, Davíd Oddsson, switched posts with Foreign Minister Halldór Ásgrímsson in accordance with an agreement after the 2003 parliamentary election.

Björn Matthíasson

▪ 2004

Area:

102,928 sq km (39,741 sq mi)

Population

(2003 est.): 290,000

Capital:

Reykjavík

Chief of state:

President Ólafur Ragnar Grímsson

Head of government:

Prime Minister Davíd Oddsson

      Elections to Iceland's Althingi (parliament) took place on May 10, 2003. The incumbent coalition of the Independence and Progressive parties received 34 seats in the 63-member legislative body and continued in office. Prime Minister Davíd Oddsson, leader of the Independence Party, announced that he would step down on Sept. 1, 2004, to be succeeded by the foreign minister and Progressive Party leader, Halldór Ásgrímsson.

      Iceland concluded a firm contract in March to build a hydroelectric-power facility at Kárahnjúkar and to sell the power to Alcoa Inc., which would build a 320,000-ton-per-year aluminum plant at Reyðarfjörður on the sparsely populated northeastern coast. The combined construction cost was estimated at $2.5 billion. The plant was expected to enter into production in 2007 and to create about 400 jobs in the depressed area.

      The government also pursued the possibility of creating a controversial water reservoir at Nordlingaalda, in the southwestern part of the country. The reservoir would feed into a series of nearby hydroelectric-power stations and make it possible to sell power for the expansion of another aluminum plant near Reykjavík. In September the project was indefinitely shelved because of environmental objections.

      In August the government decided to resume whaling, allowing a catch of 250 whales in 2003–04, of which 38 minke whales could be caught in 2003, all for scientific research. There were widespread protests from abroad but few from Icelanders.

      The economy revived in 2003, following a shallow recession. Growth in GDP was estimated at 1¹/₂–2%, after a decline of ¹/₂% in 2002. The economy was expected to accelerate in 2004–06 because of the ongoing construction of the Kárahnjúkar power facility and the Alcoa aluminum plant, which would create up to 2,000 additional jobs during the peak period of construction activity in 2005–06.

Björn Matthíasson

▪ 2003

Area:

102,819 sq km (39,699 sq mi)

Population

(2002 est.): 288,000

Capital:

Reykjavík

Chief of state:

President Ólafur Ragnar Grímsson

Head of government:

Prime Minister Davíd Oddsson

      Though the Icelandic economy had entered into a mild recession late in 2001, when economic growth slowed and inflation rose to about 9%, by early 2002 inflation had eased. This was partly due to pressure on the government by the unions, which threatened to ask for wage increases unless inflation could be brought under control. By year's end 2002, inflation stood at 1–2%, and the exchange rate had partially recovered from a sharp dip early in the year. Economic growth for the year was close to zero, however, owing to sluggish domestic demand.

      Plans were back under active consideration for the construction of a hydroelectric dam complex at Kárahnjúkar, in the northeastern part of the country, as well as for an aluminium plant at Reyðarfjörður. Despite concerns by environmental groups, an administrative appellate verdict ruled that construction could forge ahead. The government was in the process of negotiating a deal with the American company Alcoa, Inc. The $3 billion project equaled nearly one-third of Iceland's gross domestic product. Plans to establish a reservoir for hydropower stations at Norðlingaalda, in southern Iceland, ignited strong protests from environmentalists. The reservoir would touch the periphery of an important wetland area and bird refuge.

      On the question of applying for membership in the European Union, the government hesitated, primarily because Iceland would have to share its ocean fish resources with other member states and would run the risk of partly losing its independence. This was likely to be one of the main issues in parliamentary elections in spring 2003.

      Chinese Pres. Jiang Zemin paid an official visit to Iceland in the middle of June. He received a frosty greeting from the public, and several hundred Falun Gong members traveled to Iceland to stage a protest during his visit. Icelandic authorities banned a large number of foreigners who planned to participate in the demonstrations.

Björn Matthíasson

▪ 2002

Area:

102,819 sq km (39,699 sq mi)

Population

(2001 est.): 284,000

Capital:

Reykjavík

Chief of state:

President Ólafur Ragnar Grímsson

Head of government:

Prime Minister Davíd Oddsson

      Iceland's economic growth slowed to 2% in 2001 after five years of more than 4.5% growth. The economy began overheating in 2000; inflation increased and a current account deficit widened. Economic activity, which had peaked late in 2000, began shrinking during 2001. Signs of recession emerged late in the year, though employment continued to be virtually full.

      In December 2000 the Supreme Court ruled that the government had unconstitutionally reduced the disability benefits of individuals who were part of a married couple. In response, legislation was passed that increased disability benefits from $170 a month to $402, retroactive for four years.

      The policy of managing fish stocks through fishing quotas came under increased scrutiny. Despite many years of quota management, the stocks of important fish species, such as cod and haddock, were shrinking, a factor that called into question this management method and initiated a debate about whether illegal fishing was at fault for the decline. On the other hand, the system of allocating fishing quotas for free, which in turn could be sold in the open market for a windfall profit, came under increased criticism. A government-appointed commission reported that fishing quotas should be subject to a modest charge, and the government promised to introduce legislation to that effect.

      The plan to build a hydroelectric dam at Kárahnjúkar, in the northeast of the country, received a setback when it failed to pass environmental scrutiny. The power company appealed the verdict. As a result, the decision to build the dam and an aluminum plant at Reydarfjördur was postponed. Construction could not begin until 2003 at the earliest.

Björn Matthíasson

▪ 2001

Area:

102,819 sq km (39,699 sq mi)

Population

(2000 est.): 280,000

Capital:

Reykjavík

Chief of state:

President Ólafur Ragnar Grímsson

Head of government:

Prime Minister Davíd Oddsson

      Iceland continued to enjoy economic growth in 2000. Gross domestic product was expected to increase by about 3.5%, bringing total economic growth to 26% since 1996. Unlike earlier expansions, this one was not based on fisheries. Instead, biotechnology, software, and telecommunications were prominent contributors to growth. Inflation became pronounced, rising to a 5–6% annual rate in 2000.

      In 1999 a nationwide debate had raged over the planned flooding of a migratory bird habitat at Eyjabakkar, in the northeastern part of the country, for the reservoir of a hydroelectric dam. In the spring of 2000, the uproar ended in a compromise—the habitat would be spared and the reservoir moved to a nearby location, Kárahnjúkar.

      Iceland's best-known volcano, Mt. Hekla, erupted on February 26. The eruption was brief, lasting only four days, and there was no significant damage because the emission of pumice and lava was scant. Two large earthquakes took place in southwestern Iceland on June 17 and June 21, both reaching a magnitude of 6.6. Several buildings were destroyed, but there was no loss of life.

      In recent years the allocation of fishing quotas had been a source of controversy. Fishing-boat owners were allocated free catch quotas on the basis of their actual catch in the early 1980s. In turn, they could sell the quota on the open market. Critics opposed the allocation at no cost and the consequent windfall profit in case of subsequent quota sales. A government-appointed commission concluded that quotas should in the future no longer be allocated for free.

      Iceland sold its genealogical data base that had records dating back 1,000 years to DeCode, a U.S. firm, in the hope that the detailed records would provide clues for the possible cure of diseases.

Björn Matthíasson

▪ 2000

Area:

102,819 sq km (39,699 sq mi)

Population

(1999 est.): 276,000

Capital:

Reykjavík

Chief of state:

President Ólafur Ragnar Grímsson

Head of government:

Prime Minister Davíd Oddsson

      Elections to the Althingi, Iceland's legislature, took place on May 8, 1999. The incumbent government, a coalition of the Independence and Progressive parties, was continued in office. The Independence Party, under the chairmanship of Prime Minister Davíd Oddsson, won 26 seats and the Progressive Party 12 in the 63-member legislature. Three smaller groups—the Social Democratic Party, the People's Alliance, and the Women's Alliance—ran on a joint ticket and won 17 seats. The Left-Green Alliance and the Liberal Party—both new—won 6 and 2 seats, respectively.

      Iceland's economy grew at a rapid pace in 1999. Real gross domestic product increased by nearly 6% following three years of 5.2% average annual growth. Unemployment was all but wiped out by the expansion, but the annual rate of inflation reached 4% in the latter half of the year, up from 1.5–2% a year earlier.

      A major dispute erupted over the ecology of an area in the northeast of the country, where plans were under way to build a reservoir for a hydroelectric power project that would submerge magnificent river canyons and bird sanctuaries. Conservation groups were adamantly opposed to the project, whereas local interest groups claimed they needed the power to supply an aluminum plant that would boost employment in the depressed area. A decision on whether to commission an environmental-impact survey was to be debated by the Althingi in late 1999.

      Iceland settled its dispute with Norway and Russia over fishing rights in the Barents Sea. The agreement gave Iceland a conditional right to catch a certain tonnage in Norwegian and Russian waters, but the limits were much lower than the actual catches of previous years. In March the Althingi voted to end a 10-year ban on whaling after a campaign to explain Iceland's point of view.

Björn Matthíasson

▪ 1999

      Area: 102,819 sq km (39,699 sq mi)

      Population (1998 est.): 276,000

      Capital: Reykjavík

      Chief of state: President Ólafur Ragnar Grímsson

      Head of government: Prime Minister Davíd Oddsson

      Iceland's economy continued to grow at a rapid pace in 1998. Gross domestic product (GDP) was estimated to have increased by more than 5% for the third year in succession. Much of this growth stemmed from an improving fish catch, following several years of conservation efforts, and from a spurt in plant and power investment. A sharp rise in domestic demand led to a large current account deficit, estimated at 6-7% of GDP.

      The system of setting annual fish catch quotas became an increasing source of controversy. The government allotted an annual fish catch free of charge to individual boats, which they could then trade among themselves at a market price. Many, however, believed that the quota—a commonly owned resource—should be sold to the boats at a market price, and the matter promised to be one of the chief issues in the 1999 parliamentary election campaign. On December 3 the Supreme Court declared unconstitutional a provision that limited the number of boats to those in existence in 1982-83 or their equivalent replacements.

      Taking advantage of Iceland's homogeneous population and extensive genealogy records, a multinational company, deCODE genetics Inc., established operations in the nation with the purpose of conducting commercial-based research into the genetic tracing of diseases. The company persuaded the government to introduce a bill in the legislature that would allow all patient records to be merged into a common database at the company's expense in return for a 12-year exclusive user license. The bill, which passed on December 17, aroused much controversy, pitting issues of doctor-patient confidentiality against the merits of advancing science.

      The government during the year accelerated its campaign of privatizing financial institutions. It planned to sell shares in two state-owned commercial banks and an investment bank as quickly as the market would allow.

      Two of Iceland's leftist political parties, the Social Democrats and the People's Alliance, planned to present a joint ticket in the 1999 parliamentary election. Together in 1998 they held 17 seats in the 63-member legislature.

BJÖRN MATTHÍASSON

▪ 1998

      Area: 102,819 sq km (39,699 sq mi)

      Population (1997 est.): 271,000

      Capital: Reykjavík

      Chief of state: President Ólafur Ragnar Grímsson

      Head of government: Prime Minister Davíd Oddsson

      The economy of Iceland continued to grow in 1997. Gross domestic product was estimated to have increased by 3.5%, following a growth of 5.7% in 1996. The growth in 1997 was led primarily by domestic demand; private consumption rose 5% and gross fixed investment 20%. Exports, on the other hand, increased only 3%.

      Most of the rise in investment was in the expansion of aluminum production capacity. The enlargement of the aluminum plant owned by the Alusuisse-Lonza Group was completed in 1997, and construction on a new aluminum plant owned by Columbia Ventures Corp., a U.S. company, began in 1997 and was scheduled to be completed in 1998. Another source of the surge in investment was enlargement by the National Power Company (Landsvirkjun) of its hydroelectric production capacity to meet the demand for power from the two plants. Furthermore, Norsk Hydro, a Norwegian company, was considering building in Reydarfjordur in the northeast of the country an aluminum plant that would initially produce 200,000 tons a year and eventually 500,000 tons.

      Iceland's dispute with Norway and Russia over fishing by Icelandic vessels in a small pocket outside the 200-mi economic zones of each country continued in 1997, although with less intensity than in the two previous years owing to the fact that fish catches were down and fewer Icelandic vessels entered the area. The Norwegian and Icelandic coast guards maintained their vigilance toward each other's vessels and made one arrest each of fishing boats, arrests that were considered controversial. The boats were brought to harbour and fined for allegedly not reporting their catch and whereabouts in accordance with fishing regulations.

      In October the vice president of Taiwan, Lien Chan, paid an unofficial visit to Iceland with a large delegation of Taiwanese officials and businessmen. His being greeted by Prime Minister Davíd Oddsson prompted a strong protest from the government of China, which demanded that Lien be turned away; the Icelandic authorities refused. A spokesman for China hinted that by allowing the visit, Iceland would have to take the consequences of its actions. Subsequently, China canceled several impending contracts with Icelandic businesses in order to emphasize its displeasure.

BJÖRN MATTHÍASSON

▪ 1997

      Iceland is an island republic in the North Atlantic Ocean, near the Arctic Circle. Area: 102,819 sq km (39,699 sq mi). Pop. (1996 est.): 270,000. Cap.: Reykjavík. Monetary unit: Icelandic króna, with (Oct. 11, 1996) a free rate of 67.12 krónur to U.S. $1 (105.73 krónur = £ 1 sterling). Presidents in 1996, Vigdís Finnbogadóttir and, from August 1, Ólafur Ragnar Grímsson; prime minister, Davíd Oddsson.

      Iceland elected a new president on June 29, 1996. The winner was Ólafur Ragnar Grímsson, a member of the Althing (national legislature) and formerly professor of government at the University of Iceland and minister of finance and chairman of the left-wing People's Alliance. Grímsson won 41% of the vote in a four-way race.

      The nation's economy in 1996 bounced back vigorously from its eight-year slump, which had been caused by limited fish catches, partly for conservation reasons. It was estimated that gross domestic product would increase 5 1/2 % in 1996 from the previous year, and in 1997 it was expected to rise another 2-3%. The upswing in growth was led by strong consumer and investment demand along with a considerable increase in exports. Iceland's unemployment fell and was expected to be about 4% in 1997. Inflation was forecast to remain in the 2-3% range.

      Iceland was beginning to reap the dividends from its marine resource conservation policy of the past several years. There were signs of increased stocks of cod in the ocean, which permitted a relaxation of the previously stringent catch limits. The cod catch quota for the fishing year that began in September 1996 was increased from 155,000 tons to 186,000 tons, and quotas for several other species were also increased.

      The Swiss company Alusuisse-Lonza concluded an agreement with the Icelandic government to expand its aluminum plant from an annual production capacity of 100,000 tons to 162,000 tons. This represented a $220 million investment and was expected to begin operation late in 1997.

      Iceland engaged in three fishing disputes with other nations during the year. Icelandic vessels continued to fish in a disputed zone between the mainland of Norway and Svalbard archipelago, much to the annoyance of Norway and Russia. Iceland had a dispute with Norway, the Faroe Islands, and Russia over the herring catch in the area between Iceland and Norway. The third dispute concerned the shrimp catch off the coast of Canada in an area known as the Flemish Cap.

      On November 5 massive flooding, caused by a volcanic eruption in October and subsequent glacial melting, destroyed roads and bridges and knocked out power and telephone lines. Damages were estimated at about $35 million.

      (BJÖRN MATTHÍASSON)

▪ 1996

      Iceland is an island republic in the North Atlantic Ocean, near the Arctic Circle. Area: 102,819 sq km (39,699 sq mi). Pop. (1995 est.): 269,000. Cap.: Reykjavík. Monetary unit: Icelandic króna, with (Oct. 6, 1995) a free rate of 64.78 krónur to U.S. $1 (102.38 krónur = £ 1 sterling). President in 1995, Vigdís Finnbogadóttir; prime minister, Davíd Oddsson.

      Pres. Vigdís Finnbogadóttir announced at the initial session of the Althing, Iceland's national legislature, that she would not run for the presidency again when her term expired in mid-1996. She took office in 1980, the fourth president of the republic since its establishment in 1944.

      Elections to the Althing took place on April 8. Of the 63 seats being contested, the Independence Party won 25, one fewer than in the 1991 election; the Progressive Party won 15, a gain of two. The People's Alliance won nine seats, the same as in 1991, and the Social Democratic Party won seven, a loss of three. The Women's Alliance returned three, two fewer than in 1991, and a new party, the People's Movement, won four seats. As a result of the election, the government coalition of the past four years, composed of the Independence Party and the Social Democratic Party, had a majority of only one vote in the new Althing. This was too small for the Independence Party, which therefore switched coalition partners and took in the farmer-backed Progressive Party. The new coalition consisted of 40 members out of the total of 63 in the Althing.

      The Icelandic economy picked up in 1995 after having grown very slowly in recent years. Gross domestic product was estimated to have increased by 3%, primarily because of a 3% growth in exports and a rise in domestic demand. Inflation was estimated to be below 2%, remarkable for Iceland after its long history of high inflation. Unemployment was about 5%.

      Iceland's dispute with Norway and Russia over fishing rights in the Barents Sea continued without solution in 1995. Icelandic vessels continued to fish in a small area between the 200-mi exclusive economic zones of Norway, Svalbard, and Russia, taking advantage of fish stocks that, after being depleted several years earlier, had been carefully husbanded back to health by Norway and Russia. Toward the end of the year, there were indications that the matter could be solved through diplomatic negotiations.

      Heavy snows in the early months of 1995 hit the northern part of the country, particularly the northwestern peninsula. On January 16 an avalanche fell on the village of Sudavik, killing 14 persons. On October 26 another avalanche killed 20 persons in the fishing village of Flateyri.

      (BJÖRN MATTHIASSON)

▪ 1995

      Iceland is an island republic in the North Atlantic Ocean, near the Arctic Circle. Area: 102,819 sq km (39,699 sq mi). Pop. (1994 est.): 267,000. Cap.: Reykjavík. Monetary unit: Icelandic króna, with (Oct. 7, 1994) a free rate of 67.83 krónur to U.S. $1 (107.89 krónur = £ 1 sterling). President in 1994, Vigdís Finnbogadóttir; prime minister, Davíd Oddsson.

      During the spring and summer of 1994, a large number of Icelandic trawlers began fishing in a cod-rich area in the Barents Sea that lies outside the fishery limits of Norway and Russia. This caused considerable anger among Norwegian and Russian fishermen and authorities, who had done much in recent years to nurture the previously depleted fish stocks in that area back to health. Icelandic-Norwegian relations, which had always been close, cooled distinctly as a result of this dispute.

      The prospective entry of Norway, Finland, and Sweden into the European Union at the beginning of 1995 generated considerable anxiety in Iceland, which feared that it would not be able to join the EU. Thus began a considerable debate on the merits of entering the EU. The Independence Party, the nation's largest, took the position that Iceland should remain outside the EU for the time being since it already had concluded an agreement with the European Economic Area. The Social Democrats, on the other hand, decided that Iceland should apply for membership in the EU as soon as possible.

      On January 4 the governments of the United States and Iceland reached a new agreement concerning the continued U.S. and NATO military presence in Iceland. The U.S. government sought to reduce its military presence in the wake of reduced international tensions. The Icelandic authorities resisted this, partly because the air base was a large employer in an area with considerable unemployment. The two-year pact called for a gradual reduction in the number of F-15 jets stationed in Iceland from 12 to 4. It also provided for the possibility that the Icelandic authorities would take over the task of the search-and-rescue helicopter squadron stationed at the air base.

      The Icelandic economy grew slowly in 1994. Gross domestic product (GDP), measured at constant prices, rose by an estimated 2%. Inflation was about 1% for the year, a record low for a nation that had been highly inflation-prone for decades. Unemployment averaged 4.8% in 1994, an increase of 0.5% from the previous year. The current account of the balance of payments was in deficit by less than 1% of GDP for the year.

  Economic growth began to slow in 1987 because of a decline in fish stocks, the mainstay of the economy. The outlook for the cod stock, the most important species, continued to be bleak. A 23% reduction in the allowed cod catch was introduced for the fishery year begun in September 1994 in order to protect cod from continued overfishing. (See Fisheries (Agriculture and Food Supplies ) and accompanying Map—> and Chart—>.) All told, the value of the fish catch was expected to decline by 3% in 1995 following a 4% decline in 1994, both figures measured at constant prices.

      (BJÖRN MATTHÍASSON)

▪ 1994

      Iceland is an island republic in the North Atlantic Ocean, near the Arctic Circle. Area: 102,819 sq km (39,699 sq mi). Pop. (1993 est.): 264,000. Cap.: Reykjavík. Monetary unit: Icelandic króna, with (Oct. 4, 1993) a free rate of 69.25 krónur to U.S. $1 (104.92 krónur = £ 1 sterling). President in 1993, Vigdís Finnbogadóttir; prime minister, Davíd Oddsson.

      Following a deep recession in 1992, Iceland's economy remained stagnant during 1993, with gross domestic product (GDP) unchanged from the previous year. Declining export prices caused the terms of foreign trade to deteriorate and, thus, national income in real terms was estimated to have declined by 2% from 1992. Unemployment rose to an average of 4.5% for the first half of the year, the highest level since World War II. Inflation, on the other hand, remained low by previous standards, averaging 4% for the year. The deficit on current account remained moderate, estimated at under $100 million, some 1.5% of GDP.

      The main cause of the continued recession was the limit imposed on the fish catch for conservation reasons. The stock of fish in the ocean around Iceland had declined considerably in recent years owing to overfishing and inclement weather. This was particularly true of cod, the most important species, the catch of which had declined by nearly 30% since 1982-83. The cod catch limit for one year beginning in September 1993 was, therefore, reduced by 25% from the previous 12 months to 165,000 tons. Consequently, growth prospects for the Icelandic economy for the next several years were dim. Official forecasts indicated that GDP might decline by 2-3% in 1994.

      To meet the contraction in the economy and limit its impact on export industries and the balance of payments, the government devalued the currency by 6% in November 1992 and by 7.5% in June 1993. In addition, it shifted a number of taxes from businesses to households in order to improve business profitability.

      In January, following more than two years of intense and sometimes acrimonious debate, Iceland ratified the agreement whereby the member nations of the European Free Trade Association (EFTA) would join the European Community (EC) to establish a European Economic Area (EEA). The process was made extremely difficult by Switzerland's refusal to join the other EFTA nations in ratification and by Spain's declaration that it could not accede to the EEA agreement after Switzerland's rejection.

      In conjunction with the EEA agreement, Iceland concluded a fisheries accord with the EC whereby vessels from EC countries would be allowed to catch up to 3,000 tons of redfish in Icelandic waters; in turn, Iceland would be given the right to catch up to 30,000 tons of capelin in EC waters.

      Iceland continued its ban on whaling but resigned from the International Whaling Commission in 1992 in protest against the commission's intentions to enforce a ban on all whaling rather than determine where whaling could be safely pursued without endangering individual species. Thereafter, the U.S. government hinted to both Iceland and Norway that it would apply trade sanctions should either country seek to resume commercial whaling. Norway nevertheless went ahead and allowed limited whaling, and Icelandic officials strongly hinted in the second half of 1993 that they would consider the resumption of limited commercial whaling during the 1994 summer season.

      Owing to overfishing in the sea surrounding Iceland, Icelandic vessels began an intensive search for fishing possibilities in distant waters. They found a small gap in the Barents Sea outside the economic zones of the former Soviet Union and Norway and started fishing there in mid-1993 under protest from Norway, which considered the area to be within its sphere of influence.

      (BJÖRN MATTHÍASSON)

* * *

Introduction

Iceland, flag of  island country located in the North Atlantic Ocean.

      Lying on the constantly active geologic border between North America and Europe, Iceland is a land of vivid contrasts of climate, geography, and culture. Sparkling glaciers, such as Vatna Glacier ( Vatnajökull), Europe's largest, lie across its ruggedly beautiful mountain ranges; abundant hot geysers provide heat for many of the country's homes and buildings and allow for hothouse agriculture year-round; and the offshore Gulf Stream provides a surprisingly mild climate for what is one of the northernmost inhabited places on the planet.

      Iceland was founded more than 1,000 years ago during the Viking age of exploration and settled by a mixed Norse and Celtic population. The early settlement, made up primarily of Norwegian seafarers and adventurers, fostered further excursions to Greenland and the coast of North America (which the Norse called Vinland). Despite its physical isolation some 500 miles (800 km) from Scotland—its nearest European neighbour—Iceland has remained throughout its history very much a part of European civilization. The Icelandic sagas, most of which recount heroic episodes that took place at the time the island was settled, are regarded as among the finest literary achievements of the Middle Ages, reflecting a European outlook while commemorating the history and customs of a people far removed from continental centres of commerce and culture.

      The capital, Reykjavík (“Bay of Smokes”), is the site of the island's first farmstead and is a thriving city, handsome in aspect and cosmopolitan in outlook. Other major population centres are Akureyri, on the north-central coast; Hafnarfjördhur, on the southwestern coast; and Selfoss, in the southern lowlands.

      Iceland is a Scandinavian country, the world's oldest democracy but modern in nearly every respect. Unlike most European countries, however, it is ethnically homogeneous, so much so that genetic researchers have used its inhabitants to study hereditary disorders and develop cures for a host of diseases. Although increasingly integrated into the European mainstream, Icelanders take care to preserve their traditions, customs, and language. Many Icelanders, for example, still believe in elves, trolls, and other figures in the mythical landscape of the Norse past, while even Icelanders who live in cities harbour a vision of their country as a pastoral land, in the words of Nobel Prize-winning author Halldór Laxness (Laxness, Halldór), of

crofts standing at the foot of the mountains or sheltering on the southern slope of a ridge, each with a little brook running through the home-field, marshy land beyond, and a river flowing smoothly through the marsh.

Land (Iceland)

      Iceland's rugged coastline, of more than 3,000 miles (4,800 km), meets the Greenland Sea on the north, the Norwegian Sea on the east, the Atlantic Ocean on the south and west, and the Denmark Strait—which separates it from Greenland by about 200 miles (320 km)—on the northwest.

      Glacier ice and cooled lava each cover approximately one-tenth of the country's total area. The glaciers are a reminder of Iceland's proximity to the Arctic Circle, which nearly touches its northernmost peninsula. The area covered by Vatna Glacier, the country's largest, is equal to the combined total area covered by all the glaciers on the continent of Europe. The volcanoes, reaching deep into the unstable interior of the Earth, are explained by the fact that Iceland is located on top of the Mid-Atlantic Ridge. It is estimated that since the year AD 1500 about one-third of the Earth's total lava flow has poured out of the volcanoes of Iceland.

      Geologically young, Iceland contains about 200 volcanoes (volcano) of various types. A new volcano erupting on the bottom of the sea between November 1963 and June 1967 created the island of Surtsey, off the southwestern coast. The new island grew to about 1 square mile (2.5 square km) in area and rose more than 560 feet (170 metres) above sea level, a total of 950 feet (290 metres) from the ocean floor.

      Volcanic activity has been particularly frequent since the 1970s. A major eruption took place in 1973, when a volcano on Heima Island (Heimaey) spilled lava into the town of Vestmannaeyjar, an important fishing centre. Most of the more than 5,000 residents had to be evacuated, and—although the harbour remained intact—about one-third of the town was destroyed. Continuous eruptions took place in the Krafla area in the northeast in 1975–84, damaging a geothermal generating project in the area. Iceland's best-known volcano, Hekla, erupted four times in the 20th century: in 1947, 1970, 1980, and 1991; it also had a series of small eruptions in 2000. There also were two eruptions in the Vatna Glacier area, in 1983 and 1996.

Relief

 Iceland is largely a tableland broken up by structural faults. Its average elevation is 1,640 feet (500 metres) above sea level, but one-fourth of the country lies below 650 feet (198 metres). The highest point is 6,952 feet (2,119 metres), at Hvannadals Peak, the top of Öræfajökull in Vatna Glacier. (Vatnajökull) The glaciers (glacier) range in size from those in small mountain recesses to the enormous glacial caps topping extensive mountain ranges. Vatna Glacier covers an area of more than 3,000 square miles (8,000 square km) and is about 3,000 feet (900 metres) deep at its thickest point.

 Much of Iceland is underlain by basalt, a dark rock of igneous origin. The oldest rocks were formed about 16 million years ago. The landscape in basaltic areas is one of plateau and fjord, characterized by successive layers of lava visible one above the other on the valley sides. The basalt sheets tend to tilt somewhat toward the centre of the country. Iceland's U-shaped valleys are largely the result of glacial erosion. The depressed zones between the basalt areas have extensive plateaus above which rise single volcanoes, table mountains, or other mountain masses with steep sides.

      Iceland has more hot springs (hot spring) and solfataras (solfatara)—volcanic vents that emit hot gases and vapours—than any other country. Alkaline hot springs are found in some 250 areas throughout the country. The largest, Deildartunguhver, emits nearly 50 gallons (190 litres) of boiling water per second. The total power output of the Torfa Glacier area, the largest of the 19 high-temperature solfatara regions, is estimated to equal about 1,000 megawatts. Earthquakes are frequent in Iceland but rarely result in serious damage. Most of the buildings erected since the mid 20th century have been built of reinforced concrete and designed to withstand severe shocks from earthquakes.

      Traditionally, Iceland has been divided according to the four points of the compass. The centre of the country is uninhabited. In the southwest several fine natural harbours have directed interest toward the sea, and good fishing grounds lie off the shores of this region. Because of its extensive lava fields and heaths, the southwest has little farmland. The middle west is divided between fishing and farming and has many places of great natural beauty. The western fjords have numerous well-sheltered harbours and good fishing grounds but little lowland suitable for agriculture. The north is divided into several smaller districts, each of which has relatively good farmland. The eastern fjords resemble the western fjords but have, in addition, an inner lowland. The southeast, locked between the glaciers and the sea, has a landscape of rugged splendour. The southern lowland comprises the main farming region. Soil and climatic conditions are favourable, and it is close to the country's largest market, Reykjavík and its environs.

Drainage

 Heavy rainfall feeds the numerous rivers and lakes in the glaciated landscape. Many of the lakes are dammed by lava flows or glacial ice. The presence of waterfalls is typical of the geologically young mountain landscape. The rivers are mainly debris-laden streams of glacial origin or clear streams formed by rainfall and springs of underground water. In the regions not drained by glacial rivers, fjords and smaller inlets cut into the rocky coasts. Because glacial erosion has often deepened the inner portions of the fjords, there are many fine natural harbours. Elsewhere the coasts are regular, sandy, and lined extensively with offshore sandbars that form lagoons to the landward side.

Soils

      Iceland has soils of both mineral and organic composition. The mineral soils are basically a yellow-brown loess, formed by deposits of wind-transported matter. Both types of soil are suitable for agriculture, but, because of the slow rate of biological activity in the northern climate, they require heavy fertilization.

Climate

      The climate of Iceland is maritime subarctic. It is influenced by the location of the country on the broad boundary between two contrasting air currents, one of polar and the other of tropical origin. The climate is affected also by the confluence of two ocean currents: the Gulf Stream, from near the Equator, and the East Greenland Current. The latter sometimes carries Arctic drift ice to Iceland's northern and eastern shores.

      Seasonal shifts in temperature and precipitation are largely the result of weather fronts crossing the North Atlantic. Relatively cold weather, particularly in the northern part of the country, results from the movement of a front south of Iceland; mild, rainy weather is brought by the movement of a front northeastward between Iceland and Greenland. Although its northernmost points nearly touch the Arctic Circle, Iceland is much warmer than might be expected.

      Temperatures do not vary much throughout the country. The mean annual temperature for Reykjavík is 40 °F (4 °C). The mean January temperature is 31 °F (−0.5 °C), and the mean July temperature is 51 °F (11 °C). Snow falls about 100 days per year in the northwest, about 40 in the southeast. Annual precipitation ranges from 16 inches (410 mm) on some high northern plateaus to more than 160 inches (4,100 mm) on the southern slopes of some ice-capped mountains. In the south it averages about 80 inches (2,000 mm). Gales are frequent, especially in winter, and occasionally heavy fog may occur, but thunderstorms are rare. Although winters are fairly dark, Reykjavík averages nearly 1,300 hours of bright sunshine a year. Often the aurora borealis is visible, especially in fall and early winter.

Plant and animal life

      Iceland lies on the border between a tundra vegetation zone of treeless plains and a taiga zone of coniferous forests. Only about one-fourth of the country is covered by a continuous carpet of vegetation. Bogs and moors are extensive, and sparse grasslands are often overgrazed. The remains of large birch forests are found in many places. A reforestation program instituted by the government in the 1950s has shown considerable success since the mid 1970s.

      Foxes were the only land mammals in Iceland at the time of its settlement. Humans brought domestic and farm animals and accidentally introduced rats and mice. Later, reindeer were introduced, and many are still found in the northeastern highlands. After 1930, mink that were brought in for the production of furs also became wild in the country. Birdlife in Iceland is varied. Many nesting cliffs are densely inhabited, and the colony of ducks at Lake Mývatn (Mývatn), in the north, is the largest and most varied in Europe. Salmon and trout abound in the lakes, brooks, and rivers. The fishing banks off the Icelandic shores are abundantly endowed with fish, although these resources have been considerably eroded by overexploitation. There are no reptiles or amphibians in Iceland.

People (Iceland)

Ethnic groups and languages

      The population of Iceland is extremely homogeneous. The inhabitants are descendants of settlers who began arriving in AD 874 and continued in heavy influx for about 60 years thereafter. Historians differ on the exact origin and ethnic composition of the settlers but agree that between 60 and 80 percent of them were of Nordic stock from Norway. The rest, from Scotland and Ireland, were largely of Celtic (Celt) stock. The dominant language in the period of settlement was Old Norse (Old Norse language), the language spoken in Norway at the time. Through the centuries it has evolved into modern Icelandic (Icelandic language), which is used throughout the country. Modern Icelanders can still read Icelandic sagas (Icelanders' sagas) in Old Norse without difficulty. There are no ethnic distinctions. The early Nordic and Celtic stocks have long since merged, and the small number of subsequent immigrants have had no major effect on the population structure.

Religion

      The Lutheran (Lutheranism) faith has been the dominant religion since the mid 16th century. About nine-tenths of the population belongs to the state-supported Evangelical Lutheran church (National Church of Iceland). There is freedom of religion.

Settlement patterns

      Because agriculture was the chief economic activity, the population of Iceland was evenly distributed throughout the inhabitable parts of the country until the end of the 19th century. With the advent of the fishing industry, commerce, and services at the beginning of the 20th century, the population became increasingly concentrated in towns and villages. At the beginning of the 21st century, more than 90 percent of the population lived in communities of 200 or more people.

      The mainstay of most coastal towns is fishing and fish processing. The greatest population concentration is in Reykjavík and its environs, with about three-fifths of Iceland's total population. Reykjavík is a modern, cosmopolitan urban centre that—in addition to being the seat of government—is the national focus of commerce, industry, higher education, and cultural activity. Akureyri, a fishing and educational centre situated on the Eyja Fjord in the north, is second in importance. Reykjanesbaer is a fishing port on the southwestern peninsula near Keflavík International Airport. The Vestmanna (Westman) Islands (Vestmanna Islands), off the southern coast, have some of the most important fishing operations in Iceland. Akranes, located across the bay from Reykjavík, is a service town for its region and has some industry. Ísafjördhur is a service town for the western fjord area. Seydhisfjördhur and Neskaupstadhur, on the eastern coast, are important ports for herring and capelin fishing. Höfn, on the southeastern coast, is also an important fishing port. Selfoss is in the southern lowlands, serving the farming region, and is the largest inland rural community in Iceland.

Demographic trends

      The first comprehensive census in Iceland was taken in 1703, at which time 50,358 people were reported. The 18th century was marked by great economic hardship, and by 1801 the population had declined to 47,240. There began a slow increase in the 19th century, and by 1901 the population had risen to nearly 80,000. Accelerated economic growth during the early decades of the 20th century was paralleled by a rapid growth in population, which in 1950 exceeded 140,000. During World War II and the early postwar period there was rapid improvement in the standard of living and a new acceleration in the rate of population growth. The annual growth rate reached its peak during the 1950s and has been declining since 1960, primarily because of a sharply reduced birth rate and continued emigration. For a brief period from the late 1980s to the mid 1990s the birth rate rose again before resuming its downward trend. In the late 1980s the population reached a quarter of a million.

      Between 1870 and 1914 there was large-scale emigration to Canada and the United States because of unfavourable conditions in Iceland; during that period emigrants outnumbered immigrants by the equivalent of about one-fifth of the 1901 population. Since 1901 emigration has continued to exceed immigration, though usually by only a small margin.

Economy

      The Icelandic economy is based heavily on fishing and the production of a broad variety of fish products, but it also includes manufacturing and services. Exports account for about two-fifths of the gross national product. Despite Iceland's small population, the economy is modern, and the standard of living is on a par with that of other European countries.

      Most of Iceland's production is in private hands. Government ownership has declined since the early 1990s through increased privatization of government-owned enterprises. The state shares ownership of most electricity-generating systems with local governments, and it assumed control of much of the banking sector in 2008 as a result of financial crisis.

      Since World War II the government has aimed at a high rate of economic growth and full employment, and fluctuations in fish prices and catches have been an important influence on the economy. Iceland's real gross domestic product (GDP) increased by an average of about 4 percent per year after the war. After 1987, however, there was a slowdown in economic growth because of limits imposed on fish catches in response to the depletion of fish stocks that had been overexploited for many years. From the late 1980s to the late 1990s the annual GDP growth rate averaged less than half what it had been. From the late 1990s to the mid- 2000s, however, there was a strong resumption of growth, mainly as a result of an improving fish catch and an influx of foreign capital. Iceland's economy collapsed in late 2008 as a result of massive currency depreciation and the failure of its domestic banking industry.

Agriculture and fishing

      As is the case throughout the Nordic countries, less than 5 percent of Iceland's population is engaged in agriculture, and this number continues to decline. The raising of livestock—mostly sheep—and dairy farming are the main occupations. About one-fifth of the land is arable, most of it used for grazing. Greenhouses are common, especially in the southern part of the country. Iceland is virtually self-sufficient in fresh foods and dairy items, but it imports most other foodstuffs.

      A steady improvement in Iceland's fishing (commercial fishing) technology has increased catches despite the gradual erosion of what once were enormously rich fish populations off the country's coasts. During the late 1980s and early 1990s the concern over declining fish stocks led the government to strengthen already strict catch quotas to further husband eroded fish stocks—particularly cod, the most important species. The strict quota regime paid off with a sharp increase in the cod stock in the late 1990s. Those catch quotas for domestic waters led to increased fishing in foreign waters, particularly in the Barents Sea and off the coast of Newfoundland.

      Cod and capelin make up about two-thirds of the total catch, and whitefish species such as cod and haddock are exported fresh, frozen, salted, or dried. The capelin and herring catches usually are reduced to oil and meal but also are salted. In the mid-1990s Iceland's total fish catch was between about 1.5 million and 2 million tons, of which about one-third was whitefish species and two-thirds were capelin and herring. Such fishing-related industries as boatyards, repair docks, and net factories are also important.

      Iceland's entry into distant fishing waters has caused friction with other countries over fishing rights. Herring fishing in the open ocean between Norway and Iceland is a matter of debate between the two countries as is blue whiting fishing in the North Atlantic between Iceland, Norway, and the European Union (EU). Moreover, Canada has objected to Iceland's shrimp fishing off the coast of Newfoundland.

Resources and power

      Iceland's energy resources are vast. Feasible hydroenergy is estimated at nearly six gigawatts and geothermal energy at more than 1.5 million gigawatt hours per year. Only about one-eighth of the hydroelectric power of the country's rivers has been tapped. geothermal energy heats all of Reykjavík and several other communities; it provides steam for industrial energy and is used in commercial vegetable farming in greenhouses. Despite its vast natural resources, Iceland produces more greenhouse emissions per capita than any other country. To reduce emissions and eliminate the country's reliance on imported oil, in the early 21st century Iceland initiated small pilot projects aimed at determining the feasibility of creating a hydrogen-based society.

Manufacturing

      The main manufacturing enterprise for export is aluminum (aluminum processing) production, which uses domestic hydroelectricity to smelt aluminum from imported alumina. Other manufactured goods for export include ferrosilicon, an alloying agent for steel production; diatomite, an industrial filtration agent produced from diatomaceous earth with geothermal steam; fish-processing equipment; fishing gear; and prosthetic devices. There are also small industries that produce computer software, cement, fertilizer, food, clothing, and books.

Finance

      Iceland has a limited number of commercial banks that have branches throughout the country and a number of savings banks. Other financial institutions include investment credit funds, private pension funds, insurance companies, and securities firms. The financial sector was gradually deregulated in the 1980s. Interest rates were left to market forces, an important stock and bond market developed, and monetary policy—previously quite inflationary—became comparable to that of other industrialized countries. The reform of the financial market played an important part in bringing inflation under control. Capital movements to and from other countries were almost completely liberalized by the mid-1990s.

      While this sparked a boom in foreign investment in the late 1990s and the 2000s, it left Iceland's economy especially vulnerable to the vicissitudes of the global credit markets. The country's currency, the króna, showed signs of weakness beginning in 2005. Inflation skyrocketed, domestic interest rates more than doubled, and foreign investors flocked to króna-denominated bonds. The flow of foreign currency reversed abruptly in 2008, when the so-called global “credit crunch” led to the collapse of a host of international investment banks. The effect on Iceland's economy was swift and dramatic. The value of the króna plunged more than 70 percent before all currency trading was suspended, the domestic stock market shed 90 percent of its value, and interest rates fluctuated wildly. The central government took control of the three largest private banks, which held a combined liability equal to roughly 10 times the country's pre-crisis GDP, and the economy was declared to be in a state of “national bankruptcy.” Relief was sought through appeals to Scandinavian neighbours, and a series of austerity measures were implemented to secure a $2 billion loan from the International Monetary Fund.

Trade

      More than three-fifths of Iceland's exports go to the EU (European Union), which also is responsible for more than half of Iceland's imports. About one-eighth of exports go to the United States and about one-tenth to Japan. Some three-fourths of Iceland's exports are fish or fish products; aluminum comprises more than one-tenth of exports, and other manufactured products contribute about one-tenth. Iceland has been a member of the European Free Trade Association (EFTA) since 1970. In 1973 it concluded a tariff reduction agreement with the European Economic Community (now the EU), as did other EFTA countries. In 1993 Iceland joined in the creation of the European Economic Area; along with Norway and Liechtenstein, it reached an agreement with the EU to adopt most of that organization's commercial regulations and to eliminate many of the remaining commercial and administrative barriers between the countries. Nevertheless, Iceland stopped short of applying for membership to the EU because of its concern that the EU would control its fishing resources.

Services

      Featuring a breathtaking natural landscape—in particular, hot springs, geysers, and volcanoes—the country has become a major tourist destination. Icelandair (Flugleidir), a major international air carrier, has helped make the tourist trade increasingly important to the national economy. Foreign tourists number more than 300,000 a year, and the tourist industry is an important earner of foreign exchange.

Labour and taxation

      The central government receives a major portion of its income from a value-added tax and a progressive income tax, whereas local governments derive most of their revenue from a flat-rate income tax and property levies. With the government's commitment to full employment, unemployment generally has remained low. Fishing contributes greatly to Iceland's economy. Roughly 5 percent of the population is employed directly in fishing, and more than 5 percent are employed in fish processing.

      Like most countries of Scandinavia, unionization is very high. Nearly seven-eighths of employees belong to a labour union. Iceland's largest labour union, the Icelandic Federation of Labour, was established in 1916. The union is composed of more than 60,000 members, or about one out of every three workers. Although strikes were frequent in the 1970s, by the beginning of the 21st century labour unrest had become negligible.

Transportation and telecommunications

      The historic isolation of Iceland, caused by the rough seas of the North Atlantic and the country's small market and industry, was broken when steam vessels began to visit Icelandic shores late in the 19th century. The first telegraph cable to Iceland was laid in 1906, and the Iceland Steamship Company (Eimskip) was founded in 1914. Before the 20th century roads were practically unknown, the horse being the means of transportation throughout the island. Iceland has no railroads. Most of Iceland's main rural roads are paved, as are most streets in towns and villages. The majority of minor country roads, however, are still gravel. During the summer driving is possible on the extensive sandy plains in the uninhabited interior, permitting expeditions between the glaciers. The Hringvegur (“Ring Road”) stretches for about 875 miles (1,400 km), forming a circle around the island. The merchant marine fleet transports most of Iceland's imports and exports. Icelandair as well as local air service carriers are important internally in compensating for the limited road system. Keflavík International Airport, the country's primary gateway, is located about 30 miles (48 km) west of Reykjavík. Air Atlanta Icelandic, a large charter airline, is active worldwide in charter operations, particularly in flying Muslim pilgrims to Mecca from various communities in Africa and the Middle East.

      The telecommunications industry has been developed to reduce the country's dependency on the fishing industry. Significant government expenditures have resulted in Iceland's telecommunications infrastructure rivaling that of major industrialized countries. Although the telecommunications market was liberalized in the 1990s, Iceland Telecom dominated the sector. Reflecting the country's extensive telecommunications infrastructure, more than half of the population regularly used the Internet by the end of the 1990s.

Government and society

Constitutional framework

      Iceland's constitution, which was adopted in 1944, established a parliamentary democracy with a directly elected president as head of state. The powers of the president are similar to those of other heads of state in western European democracies. Real power rests with the 63-member parliament, the Althingi (Althing). One of the oldest legislative assemblies in the world, it is a unicameral legislature in which members serve four-year terms unless parliament is dissolved and new elections called. The executive branch is headed by a cabinet that must maintain majority support in parliament—or at least avoid censure—otherwise it must resign. Citizens are guaranteed the civil rights customary in Western democracies.

Local government

      Local government in Iceland is chiefly responsible for primary education, municipal services, and the administration of social programs. The country is divided into 17 provinces (sýslur), which are further subdivided into fewer than 100 municipalities. Since the 1970s their number has decreased by nearly half as a result of consolidation. Each municipality administers local matters through an elected council.

Justice

      The judiciary consists of a supreme court and a system of lower courts, most of which hear both civil and criminal cases. Cases are heard and decided by appointed judges; there is no jury system.

Political process

      The president, Althing, and local councils are elected every four years, but not necessarily all at once. All citizens 18 years of age and older may vote. Members of the Althing are selected by proportional representation in multimember constituencies. Since the late 1970s the Independence Party (1929), centre to conservative in political outlook, has commanded about one-third to two-fifths of the popular vote, and it frequently formed coalition governments. The Progressive Party (1916), which generally has been the second leading party during this period, draws its strength from rural areas. In 2000 three left-of-centre parties—the Social Democratic Party (1916), the People's Alliance (1956), and the Women's Alliance (1983)—came together to become another major player, the Social Democratic Alliance. The Left-Green Party (1998) also grew in importance. In 1980 Vigdís Finnbogadóttir (Finnbogadóttir, Vigdís) became the first woman president, a position she held for four consecutive terms until her retirement in 1996. In 2009 Jóhanna Sigurðardóttir (Sigurðardóttir, Jóhanna) became Iceland's first woman prime minister and the world's first openly gay head of government.

Security

      With the exception of a small coast guard, Iceland does not have military forces. However, in 1949 it became a charter member of the North Atlantic Treaty Organization (NATO) (North Atlantic Treaty Organization). Iceland joined the United Nations in 1946, a year after its founding. In the post-World War II period it has based its foreign policy on peaceful international cooperation and participated in joint Western defense efforts. The United States, having assumed responsibility for Iceland's defense, maintains a naval air station at Keflavík International Airport under NATO auspices.

Health and welfare

      Iceland, with compulsory health insurance that finances most medical services, has a high standard of public health and one of the highest life expectancies in the world. Hospital inpatient services are provided entirely without charge, other medical services at low cost. Dental care is partially subsidized for children up to age 16 and for retirees with low incomes. Heart disease and cancer together account for about one-half of all deaths. Welfare services include unemployment insurance, old-age and disability pensions, family and childbearing allowances, and sickness benefits. The medical and welfare systems are financed through taxation by central and local government.

Housing

      More than four-fifths of homes have been built since the country's independence in 1944. Homes are relatively large in comparison with those in other countries, particularly because the country's historically high inflation encourages people to invest in housing. Housing shortages were acute in the 1960s. However, because of a housing boom beginning in 1970, housing shortages largely have been alleviated.

Education

      Almost all schools from the primary level through the university are free. Education is compulsory through age 16, and secondary and higher education is widely available. Students can enroll in four-year academic colleges at the age of 15 or 16. Graduation from one of these colleges entitles the student to admission to the University of Iceland, founded in 1911, in Reykjavík. A second university was established at Akureyri in 1987. Since then, several other schools have elevated their curriculum to the university level and offer university-level degrees. There are also a number of technical, vocational, and specialized schools.

Cultural life

      Icelanders are proof that a small and homogeneous population can develop a rich and varied cultural life. The country's literary heritage (Icelandic literature) stems from writers of the 12th to 14th centuries who vividly recorded the sagas of Iceland's first 250 years. Other traditional arts include weaving, silver crafting, and wood carving.

 The Reykjavík area, which supports several professional theatres, a symphony orchestra, an opera, and a number of art galleries, bookstores, cinemas, and museums, has a cultural environment that compares favourably with those of cities several times its size. It also holds a biennial international art festival.

Daily life and social customs

 Iceland's character reflects both its homogeneity and its isolation, and its people take care to preserve their traditions and language by, among other things, using native terms for introduced objects—for example, the Icelandic word for computer, tölva, combines ancient terms for number and seer. Icelanders are generally reserved and confident, and, though sometimes wary of foreigners, they are friendly hosts. For centuries Iceland has been known for its traditional industries, which produce knitwear and other ancestral crafts. As in most Scandinavian countries, women have long occupied a prominent place in society, especially in government.

      There are many national and local festivals. The largest is the annual Independence Day celebration marking the country's independence in 1944. The Sumardargurinn Fyrsti festival celebrates the first day of summer, and each June the Sjómannadagurinn pays tribute to Iceland's seafaring past. The Reykjavík Arts Festival attracts many to the city.

      Icelandic cuisine centres on the country's fishing industry. Hákarl (carefully putrefied shark) is a pungent traditional food. Cod, haddock, whale blubber, and seal meat are available. Other traditional dishes include gravlax (salmon marinated in salt and dill), hangikjöt (smoked lamb), hrútspungar (rams' testicles), and slátur, a haggis-like dish made of sheep entrails. The skyr, which is made of cultured skim milk, is a distinctive Icelandic dessert, served with fresh bilberries in summer. Coffee seems omnipresent, and a unique Icelandic liquor is brennivín, which is made from potatoes and caraway.

The arts

      Art in Iceland was long connected with religion, first with the Roman Catholic church and later with the Lutheran church. The first professional secular painters appeared in Iceland in the 19th century. Gradually increasing in number, these painters—such as Jóhannes Sveinsson Kjarval, famed for his portraits of Icelandic village life—highlighted the character and beauty of their country. Painting continues to thrive in Iceland, where artists have fused foreign influences with local heritage. The work of 20th-century sculptor Ásmundur Sveinsson is also a source of pride for Icelanders. The old traditions in silver working have been retained, the most characteristic of which is the use of silver thread for ornamentation.

      Icelanders are a highly literate people who prize their country's outstanding tradition of prose and poetry. People of all ages study the ancient Icelandic sagas and, particularly in rural parts of the country, enjoy composing and performing rímur, or versified sagas. A unique contribution to Western literature, the Icelanders' sagas of the late 12th to 13th century include the Njáls saga, a prose account of a vendetta that swept the island three centuries earlier, costing dozens of lives; it is one of the longest and arguably the finest of the island's sagas. In the Laxdæla saga a love triangle unfolds disastrously, and the medieval tales of the Edda recount the doings of the gods and goddesses of the ancient Norse pantheon. Comprising two volumes—the Prose Edda and the Poetic Edda—it is the fullest and most detailed source for modern knowledge of Germanic mythology. Iceland has often been the setting of 19th- and 20th-century European literature; the volcano Snæfellsjökull, for example, figures in Jules Verne (Verne, Jules)'s popular novel Journey to the Center of the Earth (1864), and the English poets W.H. Auden (Auden, W H) and Louis MacNeice (MacNeice, Louis) drew on their travels around the country for their book Letters from Iceland (1937). Several Icelandic writers have received international acclaim, such as Halldór Laxness (Laxness, Halldór), who was awarded the Nobel Prize for Literature in 1955 and whose novel Sjálfstætt fólk (1934–35; Independent People) is a touchstone of modern Icelandic literature. Other native writers, such as Thor Vilhjálmsson, Einar Kárason, and Einar Már Gudmundsson, have written for the theatre and film, and their work has grown more international in theme and setting.

      Music enjoyed a tremendous upsurge after World War II. The programs of the Iceland Symphony are drawn from a classical repertoire and the work of modern Icelandic composers, and one or more operas or musicals are performed every year at the National Theatre and the Icelandic Opera. Popular music by Icelandic performers, such as Björk and Sigur Rós, has gained international commercial success and critical acclaim, and at the end of the 1990s Reykjavík was becoming an important recording and performing centre for popular musicians from throughout Europe. Funded by grants from the Icelandic government, a small but influential film industry also emerged in the 1990s.

      National folk traditions in applied art have achieved a new popularity. Old designs and forms have been revived, some modified to please modern tastes. Icelandic wool, knitted or woven, is the most commonly used material. It is lower in lanolin and consists of two types of fibres—one fine, soft, and insulating and the other long and water-repellent. Many people in the country participate in this industry, creating high-quality goods.

Cultural institutions

      The National Library of Iceland (founded in 1818) and the University Library (1940) merged in 1994. The National Archives were founded in 1882. The National Museum of Iceland, dating from 1863, has collections representing native Icelandic culture beginning in the Viking Age. Many old houses and ruins throughout the country are preserved under its auspices. The Árni Magnússon Institute houses a large collection of the Icelandic sagas. The National Gallery of Iceland was founded in 1884, and the great majority of its works are by modern Icelandic artists. The Natural History Museum was founded in 1889.

      The National Theatre began operation in 1950. It performs Icelandic as well as foreign classical and modern plays, operas, ballets, and musicals. The Reykjavík Theatre is the other full-time professional repertory theatre. Several theatre groups present numerous plays and musicals, both in Reykjavík and the countryside.

Sports and recreation

      Icelanders are passionate about chess, the ancient game beloved by their Viking forebears. The country abounds in chess clubs that, over the years, have produced a series of world-class grandmasters, among them Fridrik Ólafsson, Jóhann Hjartarson, Margeir Pétursson, and Jón Árnason. Glíma, a form of wrestling that originated with the Vikings, is still practiced in Iceland. Swimming in naturally heated pools, horseback riding, and various ball games also are popular, and many Icelanders ice and rock climb, with a favorite challenge being a scramble up frozen waterfalls and glacial crevasses and an ascent of the 4,167-foot (1,270-metre) Thumall (Thumb), a peak in Skaftafell National Park. Iceland's great rivers, such as the Thjórs (Thjórs River), attract fishermen and kayakers from around the world. team handball became the national sport in the 1980s, with Iceland's national team ranked among the top teams in the world.

      Iceland first competed in the Olympic Games in 1908 in London, where it was represented by one athlete. It next appeared at the 1912 Olympics in Stockholm, Sweden, but did not return to the Olympic arena until the 1936 Olympics in Berlin, Germany. Its national Olympic committee, organized in 1921, had been recognized by the International Olympic Committee a year earlier. Although the country has never won a gold medal, at the 1920 Olympics in Antwerp, Belgium, nearly all players on the gold-winning Canadian ice hockey team were of Icelandic origin.

Media and publishing

      Iceland has several independent daily newspapers, with those published in Reykjavík having the highest circulation. In addition, newspapers associated with the major political parties also are published. The Icelandic National Broadcasting Service (Ríkisútvarpid), established in 1930, is the country's main broadcasting outlet, providing radio and television programming. Several privately owned radio and television stations were established more recently, following the abolition of a state radio and television monopoly in the mid 1980s.

      Book publishing also is an active Icelandic tradition. More than 1,000 book titles are published every year. Daily independent newspapers include Morgunbladid (“Morning News”) and DV, and the country has numerous magazines and journals. The Icelandic Literary Society, founded in 1816, specializes in the publication of historical and classical works.

Valdimar Kristinsson Björn Matthíasson

History

Early history

Settlement (c. 870–c. 930)

      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 AD 870–930. 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-BC Greek explorer Pytheas of Massalia (Marseille) described a northern country that he called Thule (ultima 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.

Commonwealth (c. 930–1262)

      At the time of Iceland's settlement, Norse people worshiped gods whom they called æsir (singular áss), and this religion left behind an extensive mythology (myth) in Icelandic literature. Thor seems to have been the most popular of the pagan gods in Iceland, although Odin is thought to have been the highest in rank. It appears that heathen worship was organized around a distinct class of chieftains called godar (singular godi), of which there were about 40. In the absence of royal power in Iceland, the godar were to form the ruling class in the country.

 By the end of the settlement period, a general Icelandic assembly, called the Althing, had been established and was held at midsummer on a site that came to be called Thingvellir. This assembly consisted of a law council (lögrétta), in which the godar made and amended the laws, and a system of courts of justice, in which householders, nominated by the godar, acted on the panels of judges. At the local level, three godar usually held a joint assembly in late spring at which a local court operated, again with judges nominated by the godar. All farmers were legally obliged to belong to a chieftaincy (godord) but theoretically were free to change their allegiance from one godi to another; the godar were allotted a corresponding right to expel a follower. Some scholars have seen in this arrangement a resemblance to the franchise in modern societies. On the other hand, there was no central authority to ensure that the farmers would be able to exercise their right in a democratic way. No one was vested with executive power over the country as a whole. In any case, no trace of democratic practice reached farther down the social scale than to the heads of farming households; women and workers (free or enslaved) had no role in the political system.

Christianization

 By the end of the 10th century, the Norwegians were forced by their king, Olaf I Tryggvason, to accept Christianity. The king also sent missionaries to Iceland who, according to 12th-century sources, were highly successful in converting the Icelanders. In 999 or 1000 the Althing made a peaceful decision that all Icelanders should become Christians. In spite of this decision, the godar retained their political role, and many of them probably built their own churches. Some were ordained, and as a group they seem to have closely controlled the organization of the new religion. Two bishoprics were established, one at Skálholt in 1056 and the other at Hólar in 1106. Literate Christian culture also transformed lay life. Codification of the law was begun in 1117–18. Later the Icelanders began to write sagas, which were to reach their pinnacle of literary achievement in the next century.

Economic life

      Historians believe that early Icelandic society was prosperous. The country proved to be well suited for sheep and cattle, and both were raised for meat and milk. The sheep also yielded wool, and homespun cloth became the chief export. There was some agriculture, but grain was always imported. Timber was also imported; the only indigenous wood was birch. However abundant driftwood may have been, it could not satisfy the needs of the whole population. The Icelanders built large turf-clad houses on bulky timber frames, and some of the churches were built entirely of timber.

      In spite of the seeming abundance, the end was coming for an independent Icelandic commonwealth. In Norway royal power gained strength in the early 13th century when the king set out to unite all Norwegian Viking Age settlements under his reign. By that time about 10 powerful godar, belonging to some five families, held almost all the chieftaincies in Iceland, and by mid-century these chieftaincies were engaged in a bloody struggle for power. Finally, in 1262–64, all Icelandic chieftains and representatives of the farmers were persuaded to swear allegiance to the king of Norway, partly in the hope that he would bring peace to the country.

Iceland under foreign rule

Late Middle Ages (1262–c. 1550)

      To a large extent, Iceland was ruled separately from Norway. It had its own law code, and the Althing continued to be held at Thingvellir, though mainly as a court of justice. Most of the royal officials who succeeded the chieftains were Icelanders. In 1380 the Norwegian monarchy entered into a union with the Danish crown, but that change did not affect Iceland's status within the realm as a personal skattland (“tax land”) of the crown.

Economic growth and decline

      A fundamental change in Iceland's economy took place in the early 14th century when Norwegian merchants began to import dried fish from Iceland to Bergen. English merchants in Bergen became acquainted with Icelandic fish supplies, and shortly after 1400 they themselves began sailing to Iceland to catch fish and buy it from local fishermen. The Danish crown repeatedly tried to stop English trade in Iceland but lacked the naval power with which to defend its remote possession. One of the royal governors was killed by the English when he tried to stop their trade, an event that led indirectly to clashes between Denmark and England (1468–73). In the early 16th century English interest in Iceland declined, partly because rich fishing grounds had been discovered off the North American coast of Newfoundland. Instead, Germans became the chief foreigners to fish and trade in Iceland.

      In spite of the rise of a profitable export industry, it is generally believed that Iceland's economy deteriorated in the late Middle Ages. The birchwood that had covered great parts of the country was gradually depleted, in part because it was excellent for making charcoal. The destruction of the woodland, together with heavy grazing, led to extensive soil erosion. The climate also became more severe, and grain growing was given up altogether. At the same time, more and more of the land was acquired by ecclesiastical institutions and wealthy individuals, to whom the farmers had to pay rent.

      Twice in the 15th century, in 1402–04 and 1494–95, the plague visited Iceland and killed approximately half the population each time. Although the epidemics must have been a serious blow to the society, they presumably relieved the population pressure. This, in turn, probably postponed for centuries the emergence of permanent fishing villages on the coasts, which might have developed in the late Middle Ages from the seasonal fishing camps of the English and Germans.

The Reformation (Reformation)

      The Lutheran Reformation, which was instituted in Denmark in the 1530s, met greater resistance in Iceland than anywhere else in the realm. In 1541 the bishop of Skálholt was captured by the governor, and Lutheranism was introduced in his diocese. In the northern diocese of Hólar, Bishop Jón Arason (Arason, Jón) held out against Lutheranism for a decade longer. In 1550 he was finally captured and beheaded, without benefit of law or clergy, and all resistance to the Reformation ended. Jón's death is traditionally understood to mark the end of the Middle Ages in Iceland.

Growth of Danish royal power (c. 1550–c. 1830)

      After the Reformation the royal treasury confiscated all lands that had belonged to the Icelandic monasteries. German traders were ousted in the 16th century, and in 1602 all foreign trade in Iceland was monopolized by a royal decree and handed over to Danish merchants, who paid a rent on it to the crown. This arrangement remained intact for nearly two centuries, during which Iceland's contacts with the outside world were almost exclusively restricted to Denmark. In this period the influence of earlier contacts with England and Germany seems mostly to have disappeared. In 1787 the monopoly was abolished. Only subjects of the Danish crown, however, were permitted to carry on foreign trade, a restriction that remained in force until 1855.

      The Danish crown increased its hold on Iceland on the constitutional level as well—at least in formal terms. In 1661 Frederick III introduced an absolute monarchy in Denmark and Norway, and in the following year his absolutism was acknowledged in Iceland. This event was not of any great immediate significance in Iceland; local officials, most of whom were Icelanders, continued to make important political decisions. Danish officials in Copenhagen rarely had enough knowledge of or interest in Icelandic affairs to enforce their will if the Icelandic officials were unanimous on a different policy.

      Nevertheless, the bureaucratic state, which formed the backbone of absolutism, was gradually introduced into Iceland. An essential part of that development was the emergence of a town nucleus in Reykjavík, the first one in this hitherto entirely rural country. In the 1750s a tiny village grew up in Reykjavík as a result of a semiofficial attempt to start a wool-processing factory there. Within half a century the two ancient bishoprics were united, with the bishop residing in Reykjavík. The Althing was abolished in 1800, and an appeals court was set up in Reykjavík to succeed it. A few years later the Danish governor also settled in the town, which by then had about 300 inhabitants.

      In 1703, when the first census was taken, the population was 50,358. The main occupation was farming, though an important auxiliary occupation, undertaken mostly by rural labourers on the southern and western coasts in late winter and spring, was fishing. With few exceptions, labourers were obliged to stay in the domestic service of a farmer, and the establishment of permanent households in fishing stations was severely restricted. Thus, the landowners—with most of the native officials in their number—succeeded in monopolizing fishing and prevented it from becoming an independent industry.

      The 18th century was a period of decline and increasing poverty in Iceland. Famine—caused by a volcanic eruption and subsequent years of cold weather—plagued the country in the 1780s and killed one-fifth of the population. However, these hardships bred little criticism in Iceland of the country's status within the Danish realm. In 1809 Danish adventurer Jørgen Jørgensen seized power in Iceland for two months. When he was removed and Danish power restored, he received no support from the Icelandic population. Five years later, when Norway was severed from the Danish monarchy and given much greater autonomy under the Swedish crown, there was no push in Iceland to demand the same from Denmark.

Modern Iceland

Struggle for independence (c. 1830–1904)

      In the 1830s Iceland was allotted two seats at a new consultative assembly for the Danish Isles established at Roskilde, Denmark. This arrangement kindled a desire in Iceland for a restoration of the Icelandic Althing as a consultative assembly for the nation. Christian VIII granted the Icelanders their wish, and in 1845 a restored Althing met for the first time—not at Thingvellir, as originally intended, but in Reykjavík. Franchise to the assembly was almost entirely restricted to officials and farmers.

      In 1848 Christian's successor, Frederick VII, renounced his absolute power, and a constitutional assembly was summoned to prepare a representative democracy in Denmark. This led inevitably to the question of what was to become of Iceland in the new form of government. By that time Iceland had a relatively undisputed political leader: Jón Sigurdsson (Sigurdsson, Jón), a philologist living in Copenhagen. Jón argued that the king could only give his absolute rule over Iceland back to the Icelanders themselves, since they were the ones who had surrendered it to him in 1662. This claim was met with a royal pledge that the constitutional status of Iceland would not be decided until the Icelanders had discussed the matter at a special assembly. This assembly met in 1851, but no agreement could be reached between the Icelandic representatives and the Danish government. The assembly was dissolved in disappointment. A stalemate of more than 20 years ensued, but the Althing decided to use the occasion of the millennium of Iceland's settlement to accept the status that Danish authorities were by then willing to grant. Thus, in 1874 the king presented Iceland with a constitution whereby the Althing was vested with legislative power in internal affairs. As before, however, the cabinet minister responsible for Iceland was the minister of justice in the Danish government.

      For an additional three decades the Icelanders continued to demand that executive power be transferred to Iceland. In 1901 the path was opened when rule by parliamentary majority was introduced in Denmark and the Liberals—always more positive than the Conservatives toward the Icelanders—came into power. In 1904 Iceland got home rule, and the first Icelandic minister opened his office in Reykjavík. At the same time, rule by parliamentary majority was introduced.

      The high level of political activity in 19th-century Iceland stands in sharp contrast to its economic stagnation, which was considerable compared with the countries of western Europe. The significant growth of Iceland's population put increasing strain on the badly eroded soil in rural areas, and for many people the only visible solution was emigration to North America. Some 15,000 Icelanders emigrated between 1870 and 1914, most of them to Canada. Virtually the only successful technical innovation during that period was the introduction of decked fishing vessels, which made it possible to catch fish farther offshore than could be done on open boats. Still, at the beginning of the 20th century, more than half the annual catch was still taken in open boats.

Home rule and sovereignty (1904–44)

      The period of home rule (1904–18) was one of rapid progress. Motors were installed in many of the open fishing boats, and a number of steam-driven trawlers were acquired. The country was connected by telegraph cable with Europe. School attendance was made compulsory for children in towns and villages, and a number of schools were built. The University of Iceland was established (1911) in Reykjavík, which by 1918 had a population of 15,000. All restrictions on the freedom to move to the fishing villages were either abolished or quietly forgotten. There was a radical transformation in the occupational structure of the country, which in turn led to the advent of a labour movement. In 1916 a national organization of trade unions was established. By then unions were already widely accepted by employers as negotiating bodies, but their formal status was not legalized until 1938. In the political arena, democracy was extended to new groups. Women and propertyless men were given the franchise, subject to certain qualifications, in 1915. Four years earlier a law had been passed that gave women the right to attend schools of higher education, enter into the professions, and occupy any public office in the country.

      The struggle for greater autonomy continued until the dispute with Denmark was solved. On December 1, 1918, Iceland became a separate state under the Danish crown, with only foreign affairs remaining under Danish control. Either party, however, had the right to call for a review of the treaty, and if negotiations about its renewal proved fruitless at the end of 25 years (i.e., 1943) it would be terminated.

      The struggle for independence that had shaped Icelandic politics for almost a century now subsided, and in the 1920s a new system of political parties based on class divisions emerged. Class antagonism grew more severe during the Great Depression of the 1930s; the depression was prolonged in Iceland when the outbreak of the Spanish Civil War in 1936 closed the important Spanish market for Icelandic fish. The problem of high unemployment persisted until after the outbreak of World War II.

      The German occupation of Denmark in April 1940 effectively dissolved the union between Iceland and Denmark. A month later British forces occupied Iceland. In 1941 the United States took over the defense of Iceland and stationed a force of 60,000 in the country. The foreign forces brought employment, prosperity, and high inflation to the population, which then numbered about 120,000.

      The war made it impossible for Iceland and Denmark to renegotiate their treaty. In spite of great resentment in Denmark, the Icelanders decided to terminate the treaty, break all constitutional ties with Denmark, and establish a republic. On June 17, 1944, now celebrated as National Day, the Icelandic republic was founded at Thingvellir, with Sveinn Björnsson (Björnsson, Sveinn) as its first president.

Gunnar Karlsson

The Icelandic republic

      Since the prosperous years of World War II, Iceland has developed into a modern welfare state with growing production and consumption. A rapid restoration of the trawler fleet after the war prevented the return of prewar unemployment. Fish freezing became a highly technical industry and the mainstay of Iceland's exports. The economy became characterized by expansion, full employment, high inflation, and much unprofitable investment. It became normal to work overtime and for women to enter the labour market. The advent of regular air service to both Europe and North America in the late 1940s revolutionized communication with the outside world, and the advent of the Internet at the turn of the 21st century meant that Iceland was more connected than ever before. By 2006 it had the world's highest broadband Internet penetration, and its banks and markets were favoured destinations for international investors. The tide of capital changed in the wake of the 2008 “credit crunch,” however, and foreign investors fled, leaving Iceland's dangerously leveraged banks depleted, its currency devalued, and its inflation and interest rates hovering near 20 percent. As the crisis deepened, public outrage was increasingly directed at the right-of-centre and Independence Party-led coalition government, which resigned in early 2009, making way for a caretaker government comprising its former partner, the Social Democratic Alliance, and the Left-Green Party.

      The tendency toward overexpansion was caused in part by weak political leadership. No party has ever held an absolute majority in the Althing, and, generally, the country has been ruled by coalition government. Two coalitions had remained in power for extensive periods without interruption: one formed by the Independence Party and the more leftist Social Democratic Party that ruled from 1959 to 1971 and the other a partnership between the Independence Party and the agrarian-liberal Progressive Party that governed from 1995 until 2007.

      The blurring of the political left and right was probably caused by another dividing line in Icelandic postwar politics: that between the more integrationist Independence and Social Democratic parties and the more isolationist Progressive Party and the parties that came together to form the Social Democratic Alliance in 2000. This contrast has come to a head in controversies over three recurrent issues: defense, European integration, and the extension of the fishing limits. A fourth issue, the status of women, has formed still another dimension of Icelandic politics.

Defense

      From the time that Iceland joined the North Atlantic Treaty Organization (NATO) in 1949 and received American forces in 1951, the Independence Party has firmly supported a pro-NATO policy, while the People's Alliance has been NATO's most ardent opponent. The Social Democratic Party and the Progressives have supported NATO membership, and most of the time they have accepted the presence of American forces—the Progressives with considerably greater reluctance than the Social Democrats. Since the 1980s this issue has moved to the background, while Iceland's attitude toward Europe has occupied the foreground.

European integration

      Iceland entered the European Free Trade Association (EFTA) in 1970, in the period of the Independence and Social Democratic coalition, against the votes of the People's Alliance; the Progressives abstained from voting. As EFTA became increasingly absorbed by the European Union (EU), Iceland's treaties with the EU became more important. By the early 21st century, the Social Democratic Party alone sought full Icelandic membership in the EU, but the 2008 financial crisis found longtime EU opponents weighing the devalued króna against the euro and finding the latter to be a viable alternative.

Fishing (commercial fishing) limits

      After World War II Iceland gradually extended its exclusive fishing zone from 3 nautical miles (5.6 km) in 1950 to 200 miles (370 km) in 1975. This extension provoked strong protests from the United Kingdom and West Germany, and the British navy was repeatedly sent to the Icelandic fishing grounds to protect British trawlers. The struggle with Britain, commonly known as the “Cod Wars,” came to an end in 1976 when Britain recognized the 200-mile limit. Although all the political parties supported the claim for Iceland's dominance over the fishing grounds, only the more isolationist parties were willing to risk Iceland's good relations with its NATO partners.

      The victory in the Cod Wars was accompanied by some disappointment as the fish stocks around Iceland began to be depleted. Severe restrictions on Iceland's own fishing within its zone were inevitable. Icelandic fishing firms subsequently started deep-sea fishing on remote grounds, which led to disputes with other fishing nations—particularly with Norway and Russia over fishing in the Barents Sea.

The status of women

      Outwardly, the feminist movement may seem uniquely strong in Iceland. A woman, Vigdís Finnbogadóttir (Finnbogadóttir, Vigdís), served as president of the republic for four terms (1980–96), enjoying great popularity, and the Women's Alliance was first represented in the parliament in 1983. However, the Icelandic president typically is not influential in politics. Moreover, women still earn less income than men, suggesting that they have not yet obtained full equality. Nonetheless, when the Independence Party left the governing coalition in 2009, a woman, Jóhanna Sigurðardóttir (Sigurðardóttir, Jóhanna), became Iceland's first female prime minister as well as the world's first openly gay head of government.

Gunnar Karlsson Ed.

Additional Reading

Jóhannes Nordal and Valdimar Kristinsson (eds.), Iceland, the Republic (1996), provides a comprehensive general survey. Geologic, geothermal, geographic, and ecological characteristics of the country are studied in Ari Trausti Gudmundsson and Halldór Kjartansson, Earth in Action: An Outline of the Geology of Iceland (1996); Björn H. Róarsson and Sigurdur Sveinn Jónsson, Geysers and Hot Springs in Iceland, trans. from Icelandic (1992); Thorleifur Einarsson, Geology of Iceland: Rocks and Landscape (1994; originally published in Icelandic, 1991); Hördur Kristinsson, A Guide to the Flowering Plants and Ferns of Iceland (1987); and Sturla Fridriksson, Surtsey (1975). Illustrated descriptions and guidebooks include Björn Búriksson, The Beauty of Iceland (1992); Bernard Scudder and Páll Stefánsson, Iceland: Life and Nature on a North Atlantic Island (1991); Hjálmar R. Bárdarson, Ice and Fire: Contrasts of Icelandic Nature, trans. from Icelandic, 4th ed. (1991); Max Schmid, Iceland: The Exotic North (1985); Steindór Steindórsson Frá Hlödum (ed.), Iceland Road Guide, 4th updated ed. (1988); and David Williams, Essential Iceland (1992).Icelandic society, economy, culture, and political orientation are reviewed in The Economy of Iceland (annual), published by the Central Bank of Iceland; OECD Economic Surveys: Iceland (annual), published by the Organisation for Economic Co-operation and Development; Gudmundur Jónsson and Magnús S. Magnússon (eds.), Icelandic Historical Statistics (1997), a wide-ranging statistical abstract of Icelandic society; Hjálmar R. Bárdarson, Iceland: A Portrait of Its Land and People, 3rd ed., trans. from Icelandic (1982, reissued as 3rd ed., 1989); Kristján Eldjárn, Ancient Icelandic Art (1957); Carol J. Clover and John Lindow (eds.), Old Norse-Icelandic Literature: A Critical Guide (1985); Ólafur Th. Hardarson, Parties and Voters in Iceland: A Study of the 1983 and 1987 Elections (1995); Sigurdur A. Magnússon and Vladimir Sichov, Iceland Crucible: A Modern Artistic Renaissance (1985); and Gísli Pálsson and E. Paul Durrenberger, Images of Contemporar Iceland: Everyday Lives and Global Contexts (1996).Björn Matthíasson Jón R. Hjálmarsson, History of Iceland: From the Settlement to the Present Day (1993), is a recent survey of the subject. Gudmundur Hálfdanarson, Historical Dictionary of Iceland (1997), is useful and has a good bibliography of works in English. Scholarly studies include Jón Jóhannesson, A History of the Old Icelandic Commonwealth: Íslendinga Saga, trans. from Icelandic (1974); and Jesse L. Byock, Medieval Iceland: Society, Sagas, and Power (1988, reissued 1993). E. Paul Durrenberger and Gísli Pálsson (eds.), The Anthropology of Iceland (1989), includes essays covering the commonwealth period, 930–1262. Studies on the 20th century, with historical introductions, are Gylfi Th. Gíslason, The Challenge of Being an Icelander, trans. from Icelandic (1990); and Esbjörn Rosenblad and Rakel Sigurdardóttir-Rosenblad, Iceland from Past to Present (1993; originally published in Swedish, 1990). Gudmundur Jónsson and Magnús S. Magnússon (eds.), Icelandic Historical Statistics (1997), is an extensive bilingual (Icelandic and English) survey. Björn Thorsteinsson, Island, trans. from Icelandic (1985), is a historical survey in Danish. Sigurdur Líndal (ed.), Saga Íslands (1974– ), is a comprehensive multivolume history in Icelandic.Gunnar Karlsson

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