Iceland

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Island country in the North Atlantic Ocean, situated south of the Arctic Circle, between Greenland and Norway.

Government
Iceland is a multiparty parliamentary democracy. The 1944 constitution provides for a president, as a ceremonial head of state, and a legislature, the 63-member Althing, both elected by universal suffrage for a four-year term. Voting is by a system of proportional representation, from six constituencies, that ensures, as nearly as possible, equality between the proportions of the votes cast and seats won. This has meant that governments have almost always been coalitions of two or more parties. The prime minister and cabinet are appointed by the president on the basis of parliamentary support, and they are collectively responsible to the Althing.

History
According to literary tradition, formerly uninhabited Iceland was first settled in the late 8th century by Irish monks. However, the first archaeological evidence of settlement was by Norwegians between 870 and 930, during the era of Viking expansion and exploration.

The early period of settlement
The first Norwegian settlement was made in 870 by Ingolfur Arnason on the south coast, and was established permanently four years later at what is now Reykjavik, the settlers being attracted by its geothermal streams. Other settlers soon followed, and in the course of 60 years all the habitable parts of the coast were settled.

At this stage the settlers still worshipped the old Norse gods, and government was at first in the hands of the overseer of the temple in each settlement. Later, when the separate jurisdictions were joined together, a kind of aristocratic republic was formed, known as the Icelandic Commonwealth. The ruling chiefs established in 930 a supreme representative assembly, the Althing, which is the oldest still-functioning parliament in the world. Christianity was adopted as the national religion by the Althing in 1000, under pressure from Europe, and a bishopric was established in 1056. It was from Iceland that in around 982 Eric the Red embarked on his westward voyage, during which he discovered Greenland.

Danish rule and national awakening
In the 12th century, power became increasingly concentrated in the hands of a few rich landowners, who engaged in bitter power struggles. Haakon IV of Norway took advantage of these dissensions to make Iceland a Norwegian protectorate in 1262. When the crowns of Denmark and Norway were united in 1380, power passed, in effect, to the Danish throne. Iceland languished under Danish rule, being forced to accept Lutheranism in 1550 by Christian III, and suffering under a ruinous Danish trade monopoly in the 17th and 18th centuries. Iceland remained attached to Denmark after Norway separated and became independent in 1814.

Under the leadership of the great scholar and statesman Jón Sigurdsson (1811–1879) the 19th century was a time of great national awakening in Iceland. Denmark granted Iceland home rule in 1874. However, the country was poor, isolated, and materially backward, though the standard of popular education had always been high. Sigurdsson was followed as national leader by Bjorn Jonsson, whose work was continued by his son, Sveinn Björnsson (1881–1952), as well as by the poet Hannes Hafstein (1861–1952). Under more tolerable economic conditions the pace of progress became faster.

The early 20th century
In 1918 Iceland again became a sovereign state, but united as a constitutional monarchy to Denmark with one king. Iceland had its own flag, but Denmark represented it for foreign and defence affairs. World War I brought some trade benefit to Iceland. Previously it had been without its own merchant fleet, and thus dependent upon Denmark, but it now set about building one. The fishing fleet was expanded and modernized, and means of communication were improved. In sparsely populated and mountainous districts, roads for motor traffic were begun, and reclamation of land was accelerated. Inland passenger traffic by air began in 1928, but for another 12 years it was on a small scale, largely because there were no airfields and no capital available for making them.

World War II and independence
World War II, Nazi Germany occupied Denmark in April 1940, cutting off communications with Iceland. In response, the Althing voted for Iceland to take control of its own foreign relations and in May 1940 British naval and military forces occupied Iceland to forestall a German landing there. Icelanders agreed to cooperate with the 25,000 British occupying forces. In 1941 the Althing decided to establish a republic; however, pending the formal annulment of the union with Denmark, a regent was appointed from year to year.

During the war US troops joined the British forces occupying Iceland. The British guarantee of the future of Iceland's independence was repeated by US President Roosevelt, who said that the US government did not wish to see any change in the existing sovereignty of the country. Iceland became a key strategic staging post in the lifeline between the USA and Britain.

By a referendum held on 23 May 1944 the Act of Union of 1918 was repealed and a new constitution adopted providing for a republican form of government. Iceland become fully independent on 17 June 1944, and Sveinn Björnsson became its first president. Executive power was put in the hands of a ministry in Reykjavik, responsible to the national legislative assembly or Althing, which (until 1991) comprised two houses.

Post-war developments
World War II and the Anglo-American occupation effected revolutionary changes in Iceland. Capital flowed into the country and the US forces brought powerful machinery for road-making and similar purposes. Farm machinery of the larger type could be bought and land reclamation undertaken on a large scale. Roads could now be constructed 20 times more rapidly than before. Large-scale electrification and housing schemes were embarked upon in all parts of Iceland.

In 1949 Iceland became a member of the North Atlantic Treaty Organization and the Council of Europe, and in 1958 it agreed to US forces being stationed there. It joined the Nordic Council in 1953, and became a founder-member of the European Free Trade Association (EFTA) in 1960. It became a member of the European Economic Area.

The Cod Wars
Most of Iceland's external problems have been connected with the overfishing of the waters around its coasts. The Icelandic government's decision to extend Iceland's fishing limits from 6.4 to 19.3 km/4 to 12 mi as from September 1953 led to a prolonged dispute with Britain, whose trawlers were those most affected. There was considerable bitterness on both sides before the dispute was ended in March 1961. Britain then withdrew its objections to the 19.3 km/12 mi limit, but was permitted certain fishery concessions within the new limits for the following three years.

Trouble arose again in 1973 over Iceland's decision to extend its limits to 80.5 km/50 mi, but a temporary agreement was reached with Britain for limited fishing rights within the 80.5 km. In 1975, however, Iceland announced its decision to extend its limits to 322 km/200 mi, its fears about overfishing being exacerbated by declining fish exports, heavy devaluation, and rampant inflation. In November 1975, the 1973 agreement expired, and failure to reach a new agreement led to the third and most serious ‘Cod War’. In February 1976 Iceland broke off diplomatic relations with Britain (the first ever diplomatic break between two NATO countries). A temporary agreement in June 1976, accompanied by a resumption of diplomatic relations, was followed by renewed negotiations, and by the end of the year Britain agreed to recognize the 322 km/200 mi limit.

Since the late 1970s, a system of individual transferable quotas in the Icelandic fisheries has been in operation. In 1992 Iceland defied the worldwide ban on whaling and resumed its own whaling industry.

Politics since independence
Since independence Iceland has been governed by coalitions of the leading parties, sometimes right- and sometimes left-wing groupings, but mostly moderate. The centre and right-of-centre parties are the Independent Party (IP) and the Social Democratic Party (SDP), while those to the left are the Progressive Party (PP) and the People's Alliance (PA). More recent additions include the Women's Alliance.

Domestically, governments have been faced with the recurring problem of inflation. In 1985 the Althing unanimously declared the country a nuclear-free zone, banning the entry of all nuclear weapons.

In 1980 Vígdis Finnbogadóttir became the first woman to be the democratically elected president of a republic, serving until 1996, when Ólafur Ragnar Grímsson was elected president (being re-elected in 2000 and 2004). In April 1991 Davíd Oddsson, leader of the IP, became prime minister, and formed a centre-right IP-SDP coalition government. A new free-market IP-PP coalition was formed under Oddsson after the April 1995 general election, which privatized the state-owned telecoms operator and reduced tax rates. In 2004, Oddsson stepped down as prime minister and was replaced by Halldór Ásgrímsson, leader of the PP. In June 2006, Geir H Haarde, the new leader of the IP, took over as prime minister.

With economic growth averaging 4% a year since the mid 1990s, Iceland has become one of the world's wealthiest countries. The fishing industry still supplies 40% of export earnings and employs 8% of the workforce, but tourism and technology industries are of growing importance. Successive governments have not sought membership of the European Union because Iceland does not wish to lose control over its fishing resources. Iceland has been supportive of US foreign policy and was a member of the ‘coalition of the willing’ during the 2003 US-led invasion of Iraq.

Red and white are the traditional colours of South East Asia. The blue canton recalls the British Empire and represents unity. Yellow is the colour of the Sultans of Malaysia. Effective date: 16 September 1963. >>