Overview
Island country, northern Atlantic Ocean, between Norway and
Greenland.
Area: 39,741 sq mi (102,928 sq km). Population (2005 est.): 295,000.
Capital: Reykjavík. The people are overwhelmingly Nordic. Language:
Icelandic (official). Religion: Christianity (Evangelical Lutheran
[official]). Currency: króna. One of the most active volcanic regions in
the world, Iceland contains about 200 volcanoes and accounts for
one-third of Earth’s total lava flow. One-tenth of the area is covered
by cooled lava beds and glaciers, including Vatnajökull. Iceland’s
rugged coastline is more than 3,000 mi (4,800 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, founded in 930, is 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, the first woman in the world to be elected
a head of state, served four terms as the republic’s president
(1980–96).
Profile
Official name Lýdhveldidh Ísland (Republic of Iceland)
Form of government unitary multiparty republic with one legislative
house (Althingi, or Parliament [63])
Chief of state President
Head of government Prime Minister
Capital Reykjavík
Official language Icelandic
Official religion Evangelical Lutheran
Monetary unit króna (ISK)
Population estimate (2008) 315,000
Total area (sq mi) 39,769
Total area (sq km) 103,0001
1Total area cited by National Land Survey of Iceland.
Main
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, 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’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 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. The glaciers 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 and solfataras—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, 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
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 stock. The
dominant language in the period of settlement was Old Norse, the
language spoken in Norway at the time. Through the centuries it has
evolved into modern Icelandic, which is used throughout the country.
Modern Icelanders can still read Icelandic 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 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. 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, 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 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 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, 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.
In 2009, however, despite the country’s wish to maintain sovereignty
over its fisheries, Iceland submitted an application to join the EU.
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 became the
first woman president, a position she held for four consecutive terms
until her retirement in 1996. In 2009 Jóhanna Sigurðardóttir 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). 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
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’s
popular novel Journey to the Center of the Earth (1864), and the English
poets W.H. Auden and Louis MacNeice 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,
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, 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, 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 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
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 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, 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 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. In April 2009 the Social Democrats and Left-Greens won a slim
majority in the parliamentary elections.
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. In July 2009 the legislature narrowly
approved a proposal to seek EU membership; a week later the country
submitted its formal application.
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, 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, became Iceland’s first female prime minister as
well as the world’s first openly gay head of government.
Gunnar Karlsson
Ed.
