Iceland

Iceland is a Nordic European island country situated at the confluence of the North Atlantic and Arctic Oceans, on the Mid-Atlantic Ridge. The country has a population of about 320,000 and a total area of 103,000 km2 (40,000 sq mi), which makes it the most sparsely populated country in Europe. Sony VAIO VPCF24Q1E battery The capital and largest city is Reykjavík, with the surrounding areas in the southwestern region of the country being home to two-thirds of the country's population. Iceland is volcanically and geologically active. The interior consists mainly of a plateau characterised by sand and lava fields, mountains and glaciers, while many glacial rivers flow to the sea through the lowlandsSony VAIO VPCF13M1E/H battery. Iceland is warmed by the Gulf Stream and has a temperate climate despite a high latitude just outside the Arctic Circle.

According to Landnámabók, the settlement of Iceland began in AD 874 when the chieftain Ingólfur Arnarson became the first permanent Norse settler on the island.[8] Others had visited the island earlier and stayed over winter. Over the following centuriesSony VAIO VPCF12Z1E/BI battery, Norsemen settled Iceland, bringing with them thralls (slaves) of Gaelic origin. From 1262 to 1918 Iceland was part of the Norwegian and later the Danish monarchies. The country became independent in 1918 and a republic was declared in 1944. Until the 20th century, the Icelandic population relied largely on fishing and agriculture, and the country was one of the poorest and least developed in the worldSony VAIO VPCF12S1E/B battery. Industrialisation of the fisheries and aid from the Marshall Plan brought prosperity in the years after World War II, and by the 1990s Iceland was one of the world's wealthiest countries. In 1994, Iceland became party to the European Economic Area, which made it possible for the economy to diversify into economic and financial servicesSony VAIO VPCF13Z8E/BI battery.

Iceland has a free market economy with relatively low taxes compared to other OECD countries,[9] while maintaining a Nordic welfare system that provides universal health care and tertiary education for its citizens. In recent years, Iceland has become one of the wealthiest and most developed nations in the worldSony VAIO VPCF13Z8E battery. In 2011, it was ranked as the 14th most developed country in the world by the United Nations' Human Development Index, and the fourth most productive country per capita. In 2008, the nation's entire banking system systemically failed, resulting in substantial political unrest. Iceland ranks high in economic and political stability, though it is still in the process of recovering from the crisisSony VAIO VPCF13M1E/B battery.

Icelandic culture is founded upon the nation's Norse heritage. Most Icelanders are descendants of Norse and Gaelic settlers. Icelandic, a North Germanic language, is descended from Old Norse and is closely related to Faroese and some West Norwegian dialects. The country's cultural heritage includes traditional Icelandic cuisine, poetry, and the medieval Icelanders' sagas. Among NATO members, Iceland has the smallest population and is the only one with no standing armySony VAIO VPCF1318E/H battery.

History

Main articles: History of Iceland and Timeline of Icelandic history

Settlement and Commonwealth 874–1262

See also: Settlement of Iceland, Icelandic Commonwealth, and Christianisation of Iceland

Ingólfr Arnarson (modern Icelandic: Ingólfur Arnarson), the first permanent Norse settler in Iceland

According to both Landnámabók and Íslendingabók, Celtic monks known as the Papar lived in Iceland before the Norse settlers arrived, possibly members of a Hiberno-Scottish missionSony VAIO VPCF13J0E/H battery. Recent archaeological excavations have revealed the ruins of a cabin in Hafnir on the Reykjanes peninsula, and carbon dating indicates that it was abandoned somewhere between 770 and 880, suggesting that Iceland was populated well before 874. This archaeological find may also indicate that the monks left Iceland before the Norse arrivedSony VAIO VPCF13E8E battery.

The first known permanent Norse settler was Ingólfr Arnarson, who built his homestead in Reykjavík in the year 874. Ingólfr was followed by many other emigrant settlers, largely Norsemen and their thralls, many of whom were Irish or Scottish. By 930, most arable land had been claimed and the Althing, a legislative and judiciary parliamentSony VAIO VPCF13E4E battery, was initiated to regulate the Icelandic Commonwealth. Christianity was peacefully adopted around 999–1000, although Norse paganism persisted among some segments of the population for several years.

The Commonwealth lasted until the 13th century, when the political system devised by the original settlers proved unable to cope with the increasing power of Icelandic chieftains.

Ósvör, a replica of an old fishing outpost outside of BolungarvíkSony VAIO VPCF12M1E/H battery

The Middle Ages

A 19th-century depiction of the Alþingi of the Commonwealth in session at Þingvellir

See also: Sturlung Era

The internal struggles and civil strife of the Sturlung Era led to the signing of the Old Covenant in 1262, which ended the Commonwealth and brought Iceland under the Norwegian crown. Possession of Iceland passed to Denmark-Norway around 1380, when the kingdoms of Norway, Denmark and Sweden were united in the Kalmar UnionSony VAIO VPCF12F4E/H battery. In the ensuing centuries, Iceland became one of the poorest countries in Europe. Infertile soil, volcanic eruptions, and an unforgiving climate made for harsh life in a society where subsistence depended almost entirely on agriculture. The Black Death swept Iceland twice, first in 1402–04 and again in 1494–95. The former outbreak killed 50% to 60% of the population, and the latter 30% to 50%Sony VAIO VPCF12E1E/H battery.

[edit]Reformation and the Early Modern period

See also: Reformation in Iceland, Danish-Icelandic Trade Monopoly, and Mist Hardships

Around the middle of the 16th century, King Christian III of Denmark began to impose Lutheranism on all his subjects. Jón Arason, the last Catholic bishop of Hólar, was beheaded in 1550 along with two of his sons. The country subsequently became fully Lutheran. Lutheranism has since remained the dominant religion. In the 17th and 18th centuriesSony VAIO VPCF11Z1E/BI battery, Denmark imposed harsh trade restrictions on Iceland, while pirates from several countries raided its coasts. A great smallpox epidemic in the 18th century killed around a third of the population. In 1783 the Laki volcano erupted, with devastating effects. The years following the eruption, known as the Mist Hardships (Icelandic: Móðuharðindin), saw the death of over half of all livestock in the country, with ensuing famine in which around a quarter of the population diedSony VAIO VPCF24M1E battery.

Independence movement 1814–1918

Jón Sigurðsson, leader of the Icelandic independence movement

See also: Icelandic independence movement and Fjölnismenn

In 1814, following the Napoleonic Wars, Denmark-Norway was broken up into two separate kingdoms via the Treaty of Kiel. Iceland, however, remained a Danish dependency. Throughout the 19th century, the country's climate continued to worsen, resulting in mass emigration to the New World, particularly Manitoba in CanadaSony VAIO VPCF23S1E battery. About 15,000 people out of a total population of 70,000 left.

However, a new national consciousness had arisen, inspired by romantic and nationalist ideas from mainland Europe. An Icelandic independence movement took shape in the 1850s under the leadership of Jón Sigurðsson, riding on the burgeoning Icelandic nationalism inspired by the Fjölnismenn and other Danish-educated Icelandic intellectualsSony VAIO VPCF231S1E battery. In 1874, Denmark granted Iceland a constitution and limited home rule, which was expanded in 1904, with Hannes Hafstein serving as the first Minister for Iceland in the Danish cabinet.

Kingdom of Iceland 1918–1944

See also: Kingdom of Iceland, Invasion of Iceland, and Iceland during World War II

HMS Berwick led the British invasion of Iceland.

The Danish-Icelandic Act of Union, an agreement with Denmark signed on 1 December 1918 and valid for 25 years, recognized Iceland as a fully sovereign state in a personal union with the King of DenmarkSony VAIO VPCF23Q1E battery. The Government of Iceland established an embassy in Copenhagen and requested that Denmark should handle Icelandic foreign policy. Danish embassies around the world would display two coats of arms and two flags: those of the Kingdom of Denmark and those of the Kingdom of Iceland. During World War II, Iceland joined Denmark in asserting neutralitySony VAIO VPCF23M1E battery. After the German occupation of Denmark on 9 April 1940, the Althing declared that the Icelandic Government should assume the Danish king's duties, taking control of foreign affairs and other matters previously handled by Denmark. A month later, British armed forces invaded and occupied the country, violating Icelandic neutrality. In 1941, the occupation of Iceland was taken over by the United States so that Britain could use its troops elsewhereSony VAIO VPCF22S8E battery, an arrangement reluctantly agreed to by the Icelandic authorities.

Independent republic 1944–present

British and Icelandic vessels collide in the Atlantic Ocean during the Cod Wars

See also: Founding of the Republic of Iceland, Iceland in the Cold War, and Cod Wars

On 31 December 1943, the Danish-Icelandic Act of Union expired after 25 years. Beginning on 20 May 1944, Icelanders voted in a four-day plebiscite on whether to terminate the personal union with the King of Denmark and establish a republic. The vote was 97% in favour of ending the union and 95% in favour of the new republican constitution. Sony VAIO VPCF22S1E battery Iceland formally became a republic on 17 June 1944, with Sveinn Björnsson as its first President.

In 1946, the Allied occupation force left Iceland, which formally became a member of NATO on 30 March 1949, amid domestic controversy and riots. On 5 May 1951, a defence agreement was signed with the United States. American troops returned to Iceland, as the Iceland Defence ForceSony VAIO VPCF22M1E battery, and remained throughout the Cold War; the US withdrew the last of its forces on 30 September 2006.

Iceland had prospered during the war, and the immediate post-war period was followed by substantial economic growth, driven by industrialisation of the fishing industry and the Marshall Plan programme, through which Icelanders received by far the most aid per capita of any European country (at USD 209, with the war-ravaged Netherlands a distant second at USD 109) Sony VAIO VPCF22L1E battery. The 1970s were marked by the Cod Wars — several disputes with the United Kingdom over Iceland's extension of its fishing limits. The economy was greatly diversified and liberalised when Iceland joined the European Economic Area in 1994.

Iceland hosted a summit in Reykjavik in 1986 between United States President Ronald Reagan and Soviet Premier Mikhail Gorbachev, during which they took significant steps toward nuclear disarmamentSony VAIO VPCF22J1E battery. Only a few years later, Iceland would become the first country to recognize the independence of Estonia, Latvia, and Lithuania as they broke away from the USSR. Throughout the 1990s, the country expanded its international role and developed a foreign policy that was oriented toward humanitarian and peacekeeping causes. To that end, Iceland provided aid and expertise to various NATO-led interventions in Bosnia, Kosovo, and IraqSony VAIO VPCF11S1E/B battery.

Rise and fall of Iceland as a financial centre

See also: 2008–2012 Icelandic financial crisis and 2009 Icelandic financial crisis protests

In the years 2003–2007, following the privatization of the banking sector under the government of Davíð Oddsson, Iceland moved from being a nation best known for its fishing industry toward having an economy based on financial services and investment banking. Sony VAIO VPCF11M1E/H battery It was quickly becoming one of the most prosperous countries in the world before getting hit hard by a major financial crisis.[28] The crisis resulted in the greatest migration from Iceland since 1887, with a net emigration of 5,000 people in 2009.[29] Iceland's economy has since stabilized under the government of Jóhanna Sigurðardóttir, and is expected to grow by 2.8% in 2012Sony VAIO VPCF11D4E battery.

Geography

General topographic map

Main article: Geography of Iceland

Iceland is located at the juncture of the North Atlantic and Arctic Oceans. The main island is entirely south of the Arctic Circle, which passes through the small Icelandic island of Grímsey off the main island's northern coast. The country lies between latitudes 63° and 67° N, and longitudes 25° and 13° WSony VAIO VPCF11C5E battery.

Although Iceland is closest to Greenland (North America), it is closer to continental Europe than mainland North America; thus, the island is generally included in Europe for historical, political, cultural, and practical reasons. Geologically the island includes parts of both continental plates. The closest body of land is Greenland (290 km (180 mi)) Sony VAIO VPCF11C4E/B battery. The closest bodies of land in Europe are the Faroe Islands (420 km (260 mi)), Jan Mayen Island (570 km (350 mi)), Shetland and the Outer Hebrides, both about 740 km (460 mi), and the Scottish mainland and Orkney, both about 750 km (470 mi). The mainland of Norway is about 970 km (600 mi) awaySony VAIO PCG-31114M battery.

Iceland is the world's 18th largest island, and Europe's second largest island following Great Britain. The main island is 101,826 km2 (39,315 sq mi), but the entire country is 103,000 km2 (39,768.5 sq mi) in size, of which 62.7% is tundra. There are thirty minor islands in Iceland, including the lightly populated Grímsey and the Vestmannaeyjar archipelagoSony VAIO PCG-31113M battery. Lakes and glaciers cover 14.3% of its surface; only 23% is vegetated.[32] The largest lakes are Þórisvatn (Reservoir): 83–88 km2 (32.0–34.0 sq mi) and Þingvallavatn: 82 km2 (31.7 sq mi); other important lakes include Lagarfljót and Mývatn. Jökulsárlón is the deepest lake, at 248 m (814 ft).

Geologically, Iceland is part of the Mid-Atlantic Ridge, a ridge along which the oceanic crust spreads and forms new oceanic crustSony VAIO PCG-31112M battery. This part of the mid-ocean ridge is located above a mantle plume, causing Iceland to be subaerial (above the surface of the sea). The ridge marks the boundary between the Eurasian and North American Plates, and Iceland was created by rifting and accretion through volcanism along the ridge.

Many fjords punctuate Iceland's 4,970 km long coastline, which is also where most settlements are situated. The island's interiorSony VAIO PCG-31111M battery, the Highlands of Iceland, is a cold and uninhabitable combination of sand, mountains and lava fields. The major towns are the capital city of Reykjavík, along with its outlying towns of Kópavogur, Hafnarfjörður and Garðabær, nearby Reykjanesbær where the international airport is located, and the town of Akureyri in northern IcelandSony VAIO PCG-41112M battery. The island of Grímsey on the Arctic Circle contains the northernmost habitation of Iceland.[5] Iceland has three national parks: Vatnajökull National Park, Snæfellsjökull National Park, and Þingvellir National Park. The country is considered a "strong performer" in environmental protection, having been ranked 13th in Yale University's Environmental Performance Index of 2012Sony VAIO PCG-41111M battery.

Geology

The erupting Geysir in Haukadalur valley, the oldest known geyser in the world

Dettifoss, located in northeast Iceland. It is the largest waterfall in Europe in terms of volume discharge, with an average water flow of 200 m3/second.

Eyjafjallajökull major eruption, photo taken May 10, 2010

Main article: Geology of Iceland

See also: Iceland plume

A geologically young land, Iceland is located on both the Iceland hotspot and the Mid-Atlantic Ridge, which runs right through itSONY VAIO PCG-21212M battery. This location means that the island is highly geologically active with many volcanoes, notably Hekla, Eldgjá, Herðubreið and Eldfell. The volcanic eruption of Laki in 1783–1784 caused a famine that killed nearly a quarter of the island's population;[38] the eruption caused dust clouds and haze to appear over most of Europe and parts of Asia and Africa for several months afterwardSONY VAIO PCG-21211M battery.

Iceland has many geysers, including Geysir, from which the English word is derived, and the famous Strokkur, which erupts every 5–10 minutes. After a phase of inactivity, Geysir started erupting again after a series of earthquakes in 2000. Geysir has since then grown more quiet and does not erupt oftenSONY VAIO PCG-51212M battery.

With the widespread availability of geothermal power, and the harnessing of many rivers and waterfalls for hydroelectricity, most residents have access to inexpensive hot water, heating and electricity. The island itself is composed primarily of basalt, a low-silica lava associated with effusive volcanism as has occurred also in HawaiiSONY VAIO PCG-51211M battery. Iceland, however, has a variety of volcanic types (composite and fissure), many producing more evolved lavas such as rhyolite and andesite. Iceland has hundreds of volcanoes within approx. 30 volcanic systems active.

Surtsey, one of the youngest islands in the world, is part of Iceland. Named after Surtr, it rose above the ocean in a series of volcanic eruptions between 8 November 1963 and 5 June 1968. Only scientists researching the growth of new life are allowed to visit the island. SONY VAIO PCG-51112M battery

On 21 March 2010, a volcano in Eyjafjallajökull in the south of Iceland erupted for the first time since 1821, forcing 600 people to flee their homes. Further eruptions on 14 April forced hundreds of people to abandon their homes. The resultant cloud of volcanic ash brought major disruption to air travel across EuropeSONY VAIO PCG-51111M battery.

An iceberg near Jökulsárlón with Vatnajökull, Europe's largest glacier, in the background.

Another large eruption occurred on 21 May 2011. This time it was the Grímsvötn volcano, located under the thick ice of Europe's largest glacier, Vatnajökull. Grímsvötn is one of Iceland's most active volcanoes and this eruption was much more powerful than the 2010 Eyjafjallajökull activitySONY VAIO PCG-81212M battery. The eruption hurled ash and lava 20 km (12.43 mi) up into the atmosphere, creating a large cloud that for a while was thought to pose a danger to jet aircraft over a wide area of northern Europe.

Climate

Eyjafjallajökull glacier, one of the smallest glaciers of Iceland

Main article: Climate of Iceland

The climate of Iceland's coast is subpolar oceanic. The warm North Atlantic Current ensures generally higher annual temperatures than in most places of similar latitude in the world. Regions in the world with similar climate include the Aleutian IslandsSony VAIO PCG-81112M battery, the Alaska Peninsula, and Tierra del Fuego, although these regions are closer to the equator. Despite its proximity to the Arctic, the island's coasts remain ice-free through the winter. Ice incursions are rare, the last having occurred on the north coast in 1969.[45]

There are some variations in the climate between different parts of the island. Generally speaking, the south coast is warmer, wetter and windier than the northSONY VAIO PCG-71111M battery. The Central Highlands are the coldest part of the country. Low-lying inland areas in the north are the most arid. Snowfall in winter is more common in the north than the south.

The highest air temperature recorded was 30.5 °C (86.9 °F) on 22 June 1939 at Teigarhorn on the southeastern coast. The lowest was −38 °C (−36.4 °F) on 22 January 1918 at Grímsstaðir and Möðrudalur in the northeastern hinterland. The temperature records for Reykjavík are 26.2 °C (79.2 °F) on 30 July 2008, and −24.5 °C (−12.1 °F) on 21 January 1918SONY VAIO PCG-7196M battery.

Biodiversity

See also: Whaling in Iceland and The Botany of Iceland

An Icelandic horse

There are around 1,300 known species of insects in Iceland, which is a rather low number compared with other countries (over one million species have been described worldwide). The only native land mammal when humans arrived was the Arctic Fox,[48] which came to the island at the end of the ice age, walking over the frozen sea. On rare occasions, bats have been carried to the island with the winds, but they are not able to breed thereSONY VAIO PCG-7195M battery. Polar bears occasionally come over from Greenland, but they are just visitors, and no Icelandic populations exist.[49] There are no native or free living reptiles or amphibians on the island.

An Icelandic sheep

Phytogeographically, Iceland belongs to the Arctic province of the Circumboreal Region within the Boreal Kingdom. According to the World Wide Fund for Nature, the territory of Iceland belongs to the ecoregion of Iceland boreal birch forests and alpine tundra. SONY VAIO PCG-7194M batteryApproximately three quarters of the island are barren of vegetation; plant life consists mainly of grassland which is regularly grazed by livestock. The most common tree native to Iceland is the Northern Birch (Betula pubescens), which formerly formed forest over much of Iceland along with Aspen (Populus tremula), Rowan (Sorbus aucuparia) and Common Juniper (Juniperus communis) and other smaller treesSONY VAIO PCG-7192M battery.

When the island was first settled, it was extensively forested. In the late 12th-century Íslendingabók, Ari the Wise described it as "forested from mountain to sea shore".[51] Permanent human settlement greatly disturbed the isolated ecosystem of thin, volcanic soils and limited species diversity. The forests were heavily exploited over the centuries for firewood and timber. SONY PCG-8113M battery Deforestation, climatic deterioration during the Little Ice Age and overgrazing by sheep caused a loss of critical topsoil due to erosion. Today, many farms have been abandoned and three-quarters of Iceland's hundred thousand square kilometres are affected by soil erosion, eighteen thousand square kilometres so seriously as to be useless.[51] Only a few small birch stands now exist in isolated reservesSONY PCG-8112M battery. The planting of new forests has increased the number of trees, but does not compare to the original forests. Some of the planted forests include introduced species.

The Arctic Fox was the only indigenous mammal in Iceland prior to the arrival of humans

The animals of Iceland include the Icelandic sheep, cattle, chicken, goat, the sturdy Icelandic horse, and the Icelandic Sheepdog. Many varieties of fish live in the ocean waters surrounding Iceland, and the fishing industry is a major part of Iceland's economySONY PCG-7134M battery , accounting for approximately half of the country's total exports. Wild mammals include the Arctic Fox, mink, mice, rats, rabbits and reindeer. Polar bears occasionally visit the island, travelling on icebergs from Greenland. In June 2008, two polar bears arrived in the same month. Birds, especially seabirds, are a very important part of Iceland's animal life. Puffins, skuas, and kittiwakes nest on its sea cliffsSONY PCG-7131M battery.

Commercial whaling is practised intermittently along with scientific whale hunts.[56] Whale watching has become an important part of Iceland's economy since 1997. In early 2010, Iceland's proposed quota in killing fin whales was much larger than the amount of whale meat the Japanese market could absorb. In negotiations with Marc WallSONY PCG-7122M battery , Economic Minister-Counselor at the US embassy in Tokyo, Jun Yamashita of the Japanese Fisheries Agencies, however, rejected a proposal to suggest to Iceland to reduce the number of killed fin whales to a more reasonable number.

Politics

The political system of Iceland.

Main article: Politics of Iceland

Iceland has a left–right multi-party system. The biggest parties are the centre-left Social Democratic Alliance (Samfylkingin), the centre-right Independence Party (Sjálfstæðisflokkurinn) and the Left-Green Movement (Vinstrihreyfingin – grænt framboð) SONY PCG-7121M battery . Other political parties with seats in the Althing are the centrist Progressive Party (Framsóknarflokkurinn) and The Movement (Hreyfingin). Many other parties exist on the municipal level, most of which run only locally in a single municipality.

Iceland was the first country in the world to have a political party formed and led entirely by women.[59] Known as the Women's List or Women's Alliance (Kvennalistinn) SONY PCG-7113M battery , it was founded in 1983 to advance the political, economic, and social needs of women. After participating in its first parliamentary elections, the Women's List helped increase the proportion of female parliamentarians by 15%.[60] Although it disbanded in 1999, it left a lasting influence on Iceland's politics: every major party has a 40% quota for women, and nearly a third of the current members of parliament (as of 2009) is femaleSONY PCG-7112M battery, compared to a global average of 16%.

As of 2011, Iceland was ranked 2nd in the strength of its democratic institutions[62] and 13th in government transparency. The country has a high level of civic participation, with 84% voter turnout during the most recent elections, compared to an OECD average of 72%. However, only 50% of Icelanders say they trust their political institutionsSONY PCG-8Z3M battery , slightly less than the OECD average of 56% (and most probably a consequence of the political scandals in the wake of the Icelandic financial crisis).

Government

See also: Government of Iceland

The Althing, Iceland's national parliament, in Reykjavík

Iceland is a representative democracy and a parliamentary republic. The modern parliament, Alþingi (English: Althing), was founded in 1845 as an advisory body to the Danish monarch. It was widely seen as a re-establishment of the assembly founded in 930 in the Commonwealth period and suspended in 1799SONY PCG-8Z2M battery . Consequently, "it is arguably the world's oldest parliamentary democracy."[65] It currently has 63 members, elected for a maximum period of four years.[66] The president is elected by popular vote for a term of four years, with no term limit. The elections for president, the Althing and local municipal councils are all held separately every four yearsSONY PCG-8Z1M battery.

Stjórnarráðið, the seat of the Cabinet of Iceland, the executive branch of the government

The president of Iceland is a largely ceremonial head of state and serves as a diplomat, but can veto laws voted by the parliament and put them to a national referendum. The current president is Ólafur Ragnar Grímsson. The head of government is the prime minister (currently Jóhanna Sigurðardóttir) who, together with the cabinetSONY PCG-8Y3M battery , is responsible for executive government. The cabinet is appointed by the president after a general election to the Althing; however, the appointment is usually negotiated by the leaders of the political parties, who decide among themselves after discussions which parties can form the cabinet and how its seats are to be distributed, under the condition that it has a majority support in the AlthingSONY PCG-8Y2M battery. Only when the party leaders are unable to reach a conclusion by themselves within a reasonable time span does the president exercise this power and appoint the cabinet personally. This has not happened since the republic was founded in 1944, but in 1942 regent Sveinn Björnsson, who had been installed in that position by the Althing in 1941, appointed a non-parliamentary governmentSONY PCG-7Z1M battery. The regent had, for all practical purposes, the position of a president, and Sveinn would later become the country's first president in 1944.

The governments of Iceland have always been coalition governments, with two or more parties involved, as no single political party has ever received a majority of seats in the Althing throughout the republican period. The extent of the political power possessed by the office of the president is disputed by legal scholars in IcelandSONY PCG-6W2M battery ; several provisions of the constitution appear to give the president some important powers but other provisions and traditions suggest differently. In 1980, Icelanders elected Vigdís Finnbogadóttir as president, the world's first directly elected female head of state. She retired from office in 1996. In 2009, Iceland became the first country with an openly gay head of government when Jóhanna Sigurðardóttir became prime minister. SONY PCG-5J5M battery

Administrative divisions

Main article: Administrative divisions of Iceland

Iceland is divided into regions, constituencies, counties, and municipalities. There are eight regions which are primarily used for statistical purposes; the district court jurisdictions also use an older version of this division.[5] Until 2003, the constituencies for the parliamentary elections were the same as the regions, but by an amendment to the constitution, they were changed to the current six constituenciesSONY PCG-5K2M battery :

Reykjavík North and Reykjavík South (city regions);

Southwest (four non-contiguous suburban areas around Reykjavík);

Northwest and Northeast (northern half of Iceland, split); and,

South (southern half of Iceland, excluding Reykjavík and suburbs).

The redistricting change was made in order to balance the weight of different districts of the country, since previously a vote cast in the sparsely populated areas around the country would count much more than a vote cast in the Reykjavík city area. The imbalance between districts has been reduced by the new system, but still exists. SONY PCG-5K1M battery

Iceland's 23 counties are, for the most part, historical divisions. Currently, Iceland is split up among 26 magistrates (sýslumenn, singular sýslumaður) who represent government in various capacities. Among their duties are tax collection, administering bankruptcy declarations, and performing civil marriages. After a police reorganisation in 2007, which combined police forces in multiple counties, about half of them are in charge of police forces. SONY PCG-5J4M battery

There are 75 municipalities in Iceland which govern local matters like schools, transport and zoning.[citation needed] These are the actual second-level subdivisions of Iceland, as the constituencies have no relevance except in elections and for statistical purposes. Reykjavík is by far the most populous municipality, about four times more populous than Kópavogur, the second one. SONY PCG-5J1M battery

Foreign relations

Nordic prime ministers in 2010, with Icelandic Prime Minister Jóhanna Sigurðardóttir in the centre

Main articles: Foreign relations of Iceland and Accession of Iceland to the European Union

Iceland maintains diplomatic and commercial relations with practically all nations, but its ties with the Nordic countries, Germany, the US, Canada, and the other NATO nations are particularly close. Historically, due to cultural, economic and linguistic similaritiesSONY PCG-5G2M battery , Iceland is a Nordic country, and it participates in intergovernmental co-operation through the Nordic Council.

Iceland is a member of the European Economic Area (EEA), which allows the country access to the single market of the European Union (EU). It is not a member of EU, but in July 2009 the Icelandic parliament, the Althing, voted in favour of application for EU membership[69] and officially applied on July 17, 2009.[70]At that time, EU officials mentioned 2011 or 2012 as possible accession dates. Iceland is also a member of the UN, NATO, EFTA and OECDSony VAIO PCG-8131M battery.

[edit]Military

Main article: Military of Iceland

Iceland has no standing army. The U.S. Air Force maintained four to six interceptor aircraft at the Keflavík base, until they were withdrawn on 30 September 2006. Since May 2008, NATO nations have periodically deployed fighters to patrol Icelandic airspace under the Icelandic Air Policing mission. Sony VAIO PCG-8152M battery Iceland supported the 2003 invasion of Iraq despite much domestic controversy, deploying a Coast Guard EOD team to Iraq[74] which was replaced later by members of the Iceland Crisis Response Unit. Iceland has also participated in the ongoing conflict in Afghanistan and the 1999 NATO bombing of Yugoslavia. Despite the ongoing financial crisis the first new patrol ship in decades was launched on 29 April 2009Sony VAIO PCG-31311M battery.

Icelanders remain especially proud of their role in hosting the historic 1986 Reagan–Gorbachev summit in Reykjavík, which set the stage for the end of the Cold War. Iceland's principal historical international disputes involved disagreements over fishing rights. Conflict with the United Kingdom led to a series of so-called Cod Wars in 1952–1956 due to the extension of Iceland's fishing zone from 3 to 4 nmi Sony VAIO PCG-31111M battery (5.6 to 7.4 km; 3.5 to 4.6 mi), 1958–61 following a further extension to 12 nmi (22.2 km; 13.8 mi), 1972–73 with another extension to 50 nmi (92.6 km; 57.5 mi); and in 1975–76 another extension to 200 nmi (370.4 km; 230.2 mi).

According to the Global Peace Index, Iceland is the most peaceful country in the world, due to its lack of armed forces, low crime rate, and high level of sociopolitical stabilitySony VAIO PCG-8112M battery.

Economy

Akureyri is the largest town in Iceland outside of the Greater Reykjavík Area. Most rural towns are based on the fishing industry, which provides 40% of Iceland's exports.

Main article: Economy of Iceland

In 2007, Iceland was the seventh most productive country in the world per capita (US$54,858), and the fifth most productive by GDP at purchasing power parity ($40,112). Except for its abundant hydroelectric and geothermal power, Iceland lacks natural resourcesSony VAIO PCG-7186M battery; historically its economy depended heavily on fishing, which still provides 40% of export earnings and employs 7% of the work force.[5] The economy is vulnerable to declining fish stocks and drops in world prices for its main material exports: fish and fish products, aluminium, and ferrosilicon. Whaling in Iceland has been historically significant. Iceland still relies heavily on fishing, but its importance is diminishing from an export share of 90% in the 1960s to 40% in 2006Sony VAIO PCG-7171M battery.

Until the 20th century, Iceland was among the poorest countries in Western Europe. Currently, it remains one of the most developed countries in the world. Strong economic growth had led Iceland to be ranked first in the United Nations' Human Development Index report for 2007/2008, although as of 2011 its HDI rating had fallen to 14th place as a result of the economic crisisSony VAIO PCG-9Z1M battery. Nevertheless, according to the Economist Intelligence Index of 2011, Iceland has the 2nd highest quality of life in the world.[78] Based on the Gini coefficient, Iceland also has one of the lowest rates of income inequality in the world,[79] and when adjusted for inequality, its HDI ranking climbs to 5th place.[80] Iceland's unemployment rate has declined consistently since the crisis, Sony VAIO PCG-5S1M batterywith 4.8% of the labor force being unemployed as of June 2012, compared to 6% in 2011 and 8.1% in 2010.

Many political parties remain opposed to EU membership, primarily due to Icelanders' concern about losing control over their natural resources (particularly fisheries).[83] The national currency of Iceland is the Icelandic króna (ISK). A poll released on 5 March 2010 by Capacent Gallup showed that 31% of respondents were in favour ofSony VAIO PCG-5P1M battery adopting the euro and 69% opposed.[84] Another Capacent Gallup poll conducted in February 2012 found that 67.4% of Icelanders would reject EU membership in a referendum.

Graphical depiction of Iceland's product exports in 28 color coded categories.

Iceland's economy has been diversifying into manufacturing and service industries in the last decade, including software production, biotechnology, and financeSony VAIO PCG-5N2M battery; industry accounts for around a quarter of economic activity, while services comprise close to 70%.[86] Despite the decision to resume commercial whale hunting in 2006, the tourism sector is expanding, especially in ecotourism and whale-watching. On average, Iceland receives around 1.1 millions visitors annually, which is more than three times the native population.[87] Iceland's agriculture industrySony VAIO PCG-3C2M battery, accounting for 5.4% of GDP, consists mainly of potatoes, green vegetables (in greenhouses), mutton and dairy products. The financial centre is Borgartún in Reykjavík, which hosts a large number of companies and three investment banks. Iceland's stock market, the Iceland Stock Exchange (ISE), was established in 1985Sony VAIO PCG-8161M battery.

Iceland is ranked 27th in the 2012 Index of Economic Freedom, lower than in prior years but still among the freest in the world.[89] As of 2012, it ranks 30th in the World Economic Forum's Global Competitive Index, one place higher than in 2011. According to INSEAD's Global Innovation Index, Iceland is the 11th most innovative country in the worldSony VAIO PCG-8141M battery. Unlike most Western European countries, Iceland has a flat tax system: the main personal income tax rate is a flat 22.75%, and combined with municipal taxes, the total tax rate equals no more than 35.72%, not including the many deductions that are available. The corporate tax rate is a flat 18%, one of the lowest in the world. There is also a value added tax, whereas a net wealth tax was eliminated in 2006Sony VAIO PCG-3J1M battery. Employment regulations are relatively flexible and the labour market is one of the freest in the world. Property rights are strong and Iceland is one of the few countries where they are applied to fishery management. Like other welfare states, taxpayers pay various subsidies to each other, but with spending being less than in most European countriesSony VAIO PCG-3H1M battery.

Despite low tax rates, agricultural assistance is the highest among OECD countries and a potential impediment to structural change. Also, health care and education spending have relatively poor returns by OECD measures, though improvements have been made in both areas. The OECD Economic Survey of Iceland 2008 had highlighted Iceland's challenges in currency and macroeconomic policySony VAIO PCG-3F1M battery. There was a currency crisis that started in the spring of 2008, and on 6 October trading in Iceland's banks was suspended as the government battled to save the economy.[94] The latest assessment by the OECD determined that Iceland has made progress in many areas, particularly in creating a sustainable fiscal policy and restoring the health of the financial sector
Sony VAIO PCG-3C1M battery; however, challenges remain in making the fishing industry more efficient and sustainable, as well as in improving monetary policy in order to address inflation.[96] Iceland's public debt remains around 130%, the 6th highest in the world by proportion of national GDP.

Economic contraction

Main article: 2008–2012 Icelandic financial crisis

The Reykjavík headquarters of Íslandsbanki.

Iceland has been hit especially hard by the ongoing late-2000s recession, because of the failure of its banking system and a subsequent economic crisis. Before the crash of the country's three largest banksSony VAIO PCG-9Z2L battery, Glitnir, Landsbanki and Kaupthing, their combined debt exceeded approximately six times the nation's gross domestic product of €14 billion ($19 billion). In October 2008, the Icelandic parliament passed emergency legislation to minimise the impact of the financial crisis. The Financial Supervisory Authority of Iceland used permission granted by the emergency legislation to take over the domestic operations of the three largest banks. Icelandic officialsSony VAIO PCG-9Z1L battery, including central bank governor Davíð Oddsson, stated that the state did not intend to take over any of the banks' foreign debts or assets. Instead, new banks were established around the domestic operations of the banks, and the old banks will be run into bankruptcy.

On 28 October 2008, the Icelandic government raised interest rates to 18%, (as of August 2010, it was 7%) a move which was forced in part by the terms of acquiring a loan from the IMFSony VAIO PCG-9131L battery. After the rate hike, trading on the Icelandic króna finally resumed on the open market, with valuation at around 250 ISK per Euro, less than one-third the value of the 1:70 exchange rate during most of 2008, and a significant drop from the 1:150 exchange ratio of the week before. Iceland appealed to the Nordic countries for an additional €4 billion in aid to avert the crisis. Sony VAIO PCG-8161L battery

On 26 January 2009, the coalition government collapsed due to the public dissent over the handling of the financial crisis. A new left-wing government was formed a week later and immediately set about removing Central Bank governor Davíð Oddsson and his aides from the bank through changes in law. Oddsson was removed on 26 February 2009 in the wake of protests outside the Central BankSony VAIO PCG-8152L battery.

Thousands of Icelanders have moved from the country after the collapse, and many of those moved to Norway. In 2005, 293 people moved from Iceland to Norway; in 2009, the figure was 1,625.[103] In April 2010, the Icelandic Parliament‘s Special Investigation Commission published the findings of its investigation, revealing the extent of control fraud in this crisis. By June of 2012, Landsbanki managed to repay about half of the Icesave debtSony VAIO PCG-8141L battery.

Transport

The Ring Road of Iceland and some towns it passes through: 1. Reykjavík, 2. Borgarnes, 3. Blönduós, 4. Akureyri, 5. Egilsstaðir, 6. Höfn, 7. Selfoss.

Main article: Transport in Iceland

Iceland has a high level of car ownership per capita; with a car for every 1.5 inhabitants, it is the main form of transportation. Iceland has 13,034 km (8,099 mi) of administered roads, of which 4,617 km (2,869 mi) are paved and 8,338 km (5,181 mi) are not. A great number of roads remain unpaved to this day, mostly little-used rural roadsSony VAIO PCG-8131L battery. The road speed limits are 50 km/h (31 mph) in towns, 80 km/h (50 mph) on gravel country roads and 90 km/h (56 mph) on hard-surfaced roads.[108] Iceland currently has no railways.

Route 1, or the Ring Road (Icelandic: Þjóðvegur 1 or Hringvegur), was completed in 1974, and is a main road that runs around Iceland and connects all the inhabited parts of the island, with the interior of the island being uninhabited. This paved road is 1,337 km Sony VAIO PCG-81312L battery (831 mi) long with one lane in each direction, except near larger towns and cities and in the Hvalfjörður Tunnel (also the site of a toll) where it has more lanes. Many bridges on it, especially in the north and east, are single lane and made of timber and/or steel.

The main hub for international transport is Keflavík International Airport, which serves Reykjavík and the country in general. It is 48 km (30 mi) to the west of Reykjavík. Domestic flights, flights to Greenland and the Faroe IslandsSony VAIO PCG-81214L battery, and business flights operate mostly out of Reykjavík Airport, which lies in the city centre. Most general aviation traffic is also in Reykjavík. There are 103 registered airports and airfields in Iceland; most of them are unpaved and located in rural areas. The biggest airport in Iceland is Keflavík International Airport and the biggest airfield is Geitamelur, a four-runway field around 100 km (62 mi) east of ReykjavíkSony VAIO PCG-81115L battery, dedicated exclusively to gliding. There are a number of international airlines that fly to and from Iceland regularly.[109]

Energy

The Nesjavellir Geothermal Power Station services the Greater Reykjavík Area's hot water and electricity needs. Virtually all of Iceland's electricity comes from renewable resources.[110]

See also: Renewable energy in Iceland

Renewable sources—geothermal and hydropower—provide effectively all of Iceland's electricity and around 80% of the nation's total energy, Sony VAIO PCG-81114L battery with most of the remainder consisting of imported oil used in transportation and in the fishing fleet. Iceland expects to be energy-independent by 2050. Iceland's largest geothermal power plants are Hellisheiði and Nesjavellir, while Kárahnjúkavirkjun is the country's largest hydroelectric power stationSony VAIO PCG-81113L battery.

Icelanders emit 6.29 tonnes of CO2 in 2009 equivalent of greenhouse gases per capita.[116] Iceland is one of the few countries that have filling stations dispensing hydrogen fuel for cars powered by fuel cells. It is also one of a few countries currently capable of producing hydrogen in adequate quantities at a reasonable cost, because of Iceland's plentiful renewable sources of energySony VAIO PCG-7142L battery.

On January 22, 2009, Iceland announced its first round of offshore licences for companies wanting to conduct hydrocarbon exploration and production in a region northeast of Iceland, known as the Dreki area.

As of 2012, the government of Iceland is in talks with...