Republic of Iceland

President: Ólafur Ragnar Grímsson (1996)

Prime Minister: Sigmundur David Gunnlaugsson (2013)

Land area: 38,707 sq mi (100,251 sq km); total area: 39,768 sq mi (103,000 sq km)1

Population (2014 est.): 317,351 (growth rate: 0.65%); birth rate: 13.09/1000; infant mortality rate: 3.15/1000; life expectancy: 81.22

Capital and largest city (2011 est.): Reykjavik, 206,000

Monetary unit: Icelandic króna

National name: Lydveldid Island

Current government officials

Languages: Icelandic, English, Nordic languages, German widely spoken

Ethnicity/race: homogeneous mixture of Norse/Celtic descendants 94%, population of foreign origin 6%

Religions: Evangelical Lutheran Church of Iceland (official) 76.2%, Roman Catholic 3.4%, Reykjavik Free Church 2.9%, Hafnarfjorour Free Church 1.9%, The Independent Congregation 1%, other religions 3.6% (includes Pentecostal and Asatru Association), none 5.2%, other or unspecified 5.9% (2013 est.)

National Holiday: Independence Day, June 17

Literacy rate: 99% (2003 est.)

Economic summary: GDP/PPP (2013 est.): $13.11 billion; per capita $40,700. Real growth rate: 1.9%. Inflation: 3.9%. Unemployment: 4.5%. Arable land: 1.19%. Agriculture: potatoes, green vegetables; mutton, dairy products; fish. Labor force: 181,100; agriculture 4.8%, fishing and fish processing, industry 22.2%, services 73%. Industries: fish processing; aluminum smelting, ferrosilicon production; geothermal power, tourism. Natural resources: fish, hydropower, geothermal power, diatomite. Exports: $5.2 billion (2013 est.): fish and fish products 40%, aluminum, animal products, ferrosilicon, diatomite. Imports: $4.526 billion (2013 est.): machinery and equipment, petroleum products, foodstuffs, textiles. Major trading partners: UK, Germany, Netherlands, U.S., China, Denmark, Norway, France (2012).

Communications: Telephones: main lines in use: 189,000 (2012); mobile cellular: 346,000 (2012). Broadcast media: state-owned public TV broadcaster operates 1 TV channel nationally; several privately-owned TV stations broadcast nationally and roughly another half-dozen operate locally; about one-half the households utilize multi-channel cable or satellite TV services; state-owned public radio broadcaster operates 2 national networks and 4 regional stations; 2 privately-owned radio stations operate nationally and another 15 provide more limited coverage (2007). Internet hosts: 369,969 (2012). Internet users: 301,600 (2009).

Transportation: Railways: 0 km. Roadways: total: 12,909 km; paved: 4,782 km; unpaved: 8,108 km (2012). Ports and harbors: Grundartangi, Hafnarfjordur, Reykjavik, Airports: 96 (2013).

International disputes: Iceland, the UK, and Ireland dispute Denmark's claim that the Faroe Islands' continental shelf extends beyond 200 nm; the European Free Trade Association Surveillance Authority filed a suit against Iceland, claiming the country violated the European Economic Area agreement in failing to pay minimum compensation to Icesave depositors.

1. Including some offshore islands.

Major sources and definitions

Flag of Iceland


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


Constitutional republic.


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

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

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

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

Iceland Hit Hard by Financial Crisis

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

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

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

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

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

Ash Plume Wreaks Havoc on Air Travel

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

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

The June 2012 presidential election saw the reelection of Ólafur Ragnar Grímsson with 52.8% of the vote. The other candidates included Thóra Arnórsdóttir and Ari Trausti Gudmundsson who polled 33.2% and 8.6% respectively. Turnout was 69.2%.

Iceland not Enthusiastic About Joining the EU

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


See also Encyclopedia: Iceland.
U.S. State Dept. Country Notes: Iceland
Statistics Iceland .

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