|Conventional Long Name:||Republic of Iceland|
|Official Languages:||Icelandic (de facto)|
|Ethnic Groups:||93% Icelandic,|
|Government Type:||Parliamentary republic|
|Leader Name1:||Ólafur Ragnar Grímsson|
|Leader Title2:||Prime Minister|
|Leader Name2:||Jóhanna Sigurðardóttir|
|Leader Title3:||Speaker of the Alþingi|
|Leader Name3:||Ásta Ragnheiður Jóhannesdóttir|
|Area Magnitude:||1 E11|
|Area Sq Mi:||39,770|
|Population Estimate Rank:||175th|
|Population Estimate Year:||1 January 2011|
|Population Density Km2:||3.1|
|Population Density Sq Mi:||7.5|
|Population Density Rank:||232nd|
|Gdp Ppp:||$11.818 billion|
|Gdp Ppp Year:||2010|
|Gdp Ppp Per Capita:||$36,620|
|Gdp Nominal:||$12.594 billion|
|Gdp Nominal Year:||2010|
|Gdp Nominal Per Capita:||$39,025|
|Sovereignty Type:||Establishment — Independence|
|State Religion:||Church of Iceland|
|Established Date1:||9th century|
|Established Event3:||Union with Norway|
|Established Event4:||Danish monarchy|
|Established Date5:||5 January 1874|
|Established Event6:||Kingdom of Iceland|
|Established Date6:||1 December 1918|
|Established Date7:||17 June 1944|
|Hdi Category:||very high|
|Time Zone Dst:||not observed|
|Footnotes:||b. Web site: Statistics Iceland:Key figures. Statistics Iceland. 1 October 2002. 2011-07-02. |
c. Web site: [https://www.cia.gov/library/publications/the-world-factbook/fields/2172.html#Govt CIA – The World Factbook – Field Listing – Distribution of family income – Gini index]. United States government. 14 September 2008.
Iceland (Icelandic: '''Ísland''', ; see Names for Iceland), officially called Republic of Iceland and sometimes its counterpart Lýðveldið Ísland in Icelandic (for example this is a part of the name of the Constitution of Iceland, Stjórnarskrá lýðveldisins Íslands). It is a Nordic European island country in the North Atlantic Ocean, on the Mid-Atlantic Ridge. The country has a population of about 320,000 and a total area of 103000km2. The capital and the 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 mainly consists of a plateau characterised by sand fields, mountains and glaciers, while many glacial rivers flow to the sea through the lowlands. 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. Others had visited the island earlier and stayed over winter. Over the following centuries, Norsemen settled Iceland, bringing with them thralls (serfs) of Gaelic origin. From 1262 to 1918 Iceland was part of the Norwegian and later the Danish monarchies. Until the 20th century, the Icelandic population relied largely on fisheries and agriculture. Industrialisation of the fisheries and Marshall Aid brought prosperity in the years after World War II. In 1994, Iceland became party to the European Economic Area, which made it possible for the economy to diversify into economic and financial services.
Iceland has a free market economy with relatively low taxes compared to other OECD countries, while maintaining a Nordic welfare system providing universal health care and tertiary education for its citizens. In recent years, Iceland has been one of the wealthiest and most developed nations in the world. 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, political unrest occurred as the nation's entire banking system systemically failed.
Icelandic culture is founded upon the nation's Norse heritage. Most Icelanders are descendants of Norse (particularly from Western Norway) and Gaelic settlers. Icelandic, a North Germanic language, 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. Currently, Iceland has the smallest population among NATO members and is the only one with no standing army.
One theory suggests the first people to have visited Iceland were members of a Hiberno-Scottish mission or hermits, also known as Papar, who came in the 8th century, though no archaeological discoveries support this hypothesis. The monks are supposed to have left with the arrival of Norsemen, who systematically settled in the period c. 870–930.
Recently archeologists have found the ruins of a cabin in Hafnir on the Reykjanes peninsula (close to Keflavík Airport). Carbon dating reveals that the cabin was abandoned between 770 and 880, suggesting that someone had come to Iceland well before 874. The first known permanent Norse settler was Ingólfur Arnarson, who built his homestead in Reykjavík in the year 874. Ingólfur was followed by many other emigrant settlers, largely Norsemen and their Irish slaves. By 930, most arable land had been claimed and the Althing, a legislative and judiciary parliament, was initiated to regulate the Icelandic Commonwealth. Christianity was adopted c. 999–1000
The Commonwealth lasted until 1262 when the political system devised by the original settlers proved unable to cope with the increasing power of Icelandic chieftains.
See also: Age of the Sturlungs.
The internal struggles and civil strife of the Sturlung Era led to the signing of the Old Covenant in 1262, which 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 Union. In the ensuing centuries, Iceland became one of the poorest countries settled by Europeans. 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 in 1402–04 and 1494–95, the first time killing as much as 50% to 60% of the population, and 30% to 50% in the second.
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 centuries, 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 died.
See also: Icelandic independence movement.
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 grow worse, resulting in mass emigration to the New World, particularly Manitoba in Canada. About 15,000 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 arose in the 1850s under the leadership of Jón Sigurðsson, riding on the burgeoning nationalism in the country inspired by the Fjölnismenn and other Danish-educated Icelandic intellectuals. In 1874, Denmark granted Iceland a constitution and limited home rule, which was expanded in 1904.
The Danish-Icelandic Act of Union, an agreement with Denmark signed on 1 December 1918 and valid for 25 years, recognised Iceland as a fully sovereign state in a personal union with the King of Denmark.The Government of Iceland established an embassy in Copenhagen. However, it 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 neutrality. 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 occupied Iceland in order to stop the nation siding with the now occupied Denmark. In 1941, the occupation of Iceland was taken over by the United States so that Britain could use its troops elsewhere.
On 31 December 1943, the Act of Union agreement 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. Iceland formally became a republic on 17 June 1944, with Sveinn Björnsson as the first President.
See also: Cod Wars.
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 Force, and remained throughout the Cold War; the US withdrew the last of its forces on 30 September 2006.
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 the most aid per capita of any European country (at USD 209, with the Netherlands a distant second at USD 109).  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.
See also: 2009 Icelandic financial crisis protests. In the years 2003–2007, Iceland developed from a nation best known for its fishing industry into a country providing sophisticated financial services, but was consequently hit hard by the 2008–2011 Icelandic financial crisis. The crisis has resulted in the greatest migration from Iceland since 1887, with 5000 Icelanders emigrating in 2009.
See main article: Geography of Iceland.
Iceland is located in the North Atlantic Ocean. 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° W.
Though Iceland is nearer to Greenland (North America) than mainland Europe, the island is generally included in Europe for cultural reasons. Geologically the island is part of both continental plates. The closest bodies of land are Greenland (287km) and the Faroe Islands (420km). The closest distance to the mainland of Europe is 970km (to Norway).
Iceland is the world's 18th largest island, and Europe's second largest island following Great Britain. The main island is 101826km², but the entire country is 1030001NaN1 in size, of which 62.7% is tundra. There are thirty minor islands in Iceland, including the lightly populated island of Grímsey and the Vestmannaeyjar archipelago. Lakes and glaciers cover 14.3%; only 23% is vegetated. The largest lakes are Þórisvatn (Reservoir): 83– and Þingvallavatn: 821NaN1; other important lakes include Lagarfljót and Mývatn. Jökulsárlón is the deepest lake, at 2480NaN0.
Geologically, Iceland is a part of the Mid-Atlantic Ridge, the ridge along which the oceanic crust spreads and forms new oceanic crust. In addition, this part of the mid-ocean ridge is located atop a mantle plume causing Iceland to be subaerial. Iceland marks the boundary between both the Eurasian Plate and the North American Plate since it has been created by rifting, and accretion through volcanism, along the Mid-Atlantic Ridge — where the two plates meet.
Many fjords punctuate its 4,970-km-long coastline, which is also where most settlements are situated. The island's interior, the Highlands of Iceland, is a cold and uninhabitable combination of sand and mountains. The major towns are the capital of Reykjavík, along with its outlying towns of Kópavogur, Hafnarfjörður and Garðabær, Reykjanesbær, where the international airport is located, and Akureyri, in northern Iceland. The island of Grímsey on the Arctic Circle contains the northernmost habitation of Iceland. Iceland has three national parks: Vatnajökull National Park, Snæfellsjökull National Park, and Þingvellir National Park.
See 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 it. 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; the eruption caused dust clouds and haze to appear over most of Europe and parts of Asia and Africa for several months afterward.
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 often.
With the widespread availability of geothermal power, and the harnessing of many rivers and waterfalls for hydroelectricity, most residents have inexpensive hot water and home heat. The island itself is composed primarily of basalt, a low-silica lava associated with effusive volcanism as has occurred also in Hawaii. Iceland, however, has a variety of volcanic types (Composite- & 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.
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 Europe.
Another large eruption occurred on 21 May 2011. This time it was the Grímsvötn volcano, located under the thick ice of one of Europe's largest glaciers, the Vatnajökull. Grímsvötn is one of Iceland's most active volcanoes and this eruption was much more powerful than the 2010 Eyjafjallajökull activity. Debris was thrown 20km up in the atmosphere, creating a large ash cloud that, for a while, was thought to pose a danger to jet aircraft over a wide area of northern Europe.
See 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 Islands, 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.
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 north. 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 on 22 June 1939 at Teigarhorn on the southeastern coast. The lowest was NaN°C on 22 January 1918 at Grímsstaðir and Möðrudalur in the northeastern hinterland. The temperature records for Reykjavík are 26.2°C on 30 July 2008, and NaN°C on 21 January 1918.
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, which came to the island at the end of the ice age, walking over the frozen sea. On rare occasions, bats which have been carried to the island with the winds can be seen, but they are not able to breed there. Polar bears have also shown up through the history, yet they are just visitors, and no Icelandic populations exist. There are no native or free living reptiles or amphibians on the island.
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. Approximately 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 trees.
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". 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. Deforestation, climatic deterioration during the Little Ice Age and overgrazing by sheep, causing 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. Only a few small birch stands now exist in isolated reserves. 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 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 main contributor to Iceland's economy, accounting for more than 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 cliffs.
Commercial whaling is practised intermittently  along with scientific whale hunts. 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 Wall, 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.
See main article: Politics of Iceland.
Iceland has a left–right multi-party system. The biggest parties are the Social Democratic Alliance (Samfylkingin), the centre-right Independence Party (Sjálfstæðisflokkurinn) and the Left-Green Movement (Vinstrihreyfingin – grænt framboð). 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 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 1799. Consequently, "it is arguably the world's oldest parliamentary democracy." It currently has 63 members, elected for a maximum period of four years. The president is elected by popular vote for a term of four years, with no term limit. The government and local councils are elected separately from the presidential elections every four years.
The president of Iceland is a largely ceremonial head of state and serves as a diplomat, but can block a law voted by the parliament and put it 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 cabinet, 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 Althing. Only when the party leaders are unable to reach a conclusion by themselves in a reasonable time does the president exercise this power and appoint the cabinet himself or herself. This has not happened since the republic was founded in 1944, but in 1942 the regent of the country (Sveinn Björnsson who had been installed in that position by the Althing in 1941) did appoint a non-parliamentary government. The regent had, for all practical purposes, the position of a president, and Sveinn in fact became the country's first president in 1944.
The governments of Iceland have almost always been coalitions with two or more parties involved, as no single political party has received a majority of seats in the Althing during the republic. The extent of the political power possessed by the office of the president is disputed by legal scholars in Iceland; 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 country's first directly elected female head of state. She retired from office in 1996. In 2009, Iceland became the first country to elect an openly gay head of state when Johanna Sigurdardottir was voted into office.
See 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. 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 constituencies:
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.
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.
There are 79 municipalities in Iceland which govern local matters like schools, transport and zoning. 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.
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, and due to continuing cultural, economic and linguistic similarities, Iceland is considered politically one of the Nordic countries, 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 and officially applied on July 17, 2009. EU officials mentioned 2011 or 2012 as possible accession dates. Iceland is also a member of the UN, NATO, EFTA and OECD.
See main article: Military of Iceland.
Iceland has no standing army. The U.S. Air Force maintained four to six interceptors at the Keflavík base, until 30 September 2006 when they were withdrawn. Since May 2008 NATO nations have periodically deployed fighters to patrol Icelandic airspace under the Icelandic Air Policing mission.  Iceland supported the 2003 invasion of Iraq despite much controversy in Iceland, deploying a Coast Guard EOD team to Iraq 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 2009.
Icelanders remain especially proud of the role Iceland played 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 3to, 1958–61 following a further extension to 121NaN1, 1972–73 with another extension to 501NaN1; and in 1975–76 another extension to 2001NaN1.
See 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 resources; historically its economy depended heavily on fishing, which still provides 40% of export earnings and employs 7% of the work force. 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 2006.
While Iceland is a highly developed country, until the 20th century it was among the poorest countries in Western Europe. However, strong economic growth has led Iceland to be ranked first in the United Nations' Human Development Index report for 2007/2008, and the 14th longest-living nation with a life expectancy at birth of 80.67 years. Many political parties remain opposed to EU membership, primarily due to Icelanders' concern about losing control over their natural resources.
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 of adopting the euro and 69% opposed. Iceland's economy has been diversifying into manufacturing and service industries in the last decade, including software production, biotechnology, and financial services. Despite the decision to resume commercial whale hunting in 2006, the tourism sector is expanding, with the recent trends in ecotourism and whale-watching. Iceland's agriculture industry consists mainly of potatoes, green vegetables (in greenhouses), mutton and dairy products. The financial centre is Borgartún in Reykjavík, hosting a large number of companies and three investment banks. Iceland's stock market, the Iceland Stock Exchange (ISE), was established in 1985.
Iceland ranked 5th in the Index of Economic Freedom 2006 and 14th in 2008. 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 is not more than 35.72%, and there are many deductions. The corporate tax rate is a flat 18%, one of the lowest in the world. Other taxes include a value added tax; a net wealth tax was eliminated in 2006. Employment regulations are relatively flexible. Property rights are strong and Iceland is one of the few countries where they are applied to fishery management. Taxpayers pay various subsidies to each other, similar to European countries with welfare state, but the spending is less than in most European countries.
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 return by OECD measures. OECD Economic survey of Iceland 2008 highlighted Iceland's challenges in currency and macroeconomic policy. 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.
See main article: 2008–2011 Icelandic financial crisis.
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 three largest banks in Iceland, 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 officials, 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 IMF. 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 has appealed to Nordic countries for an additional €4 billion in aid to avert the continuing crisis.
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.
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. 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.
See 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 transport. Iceland has 13034km of administered roads, of which 4617km are paved and 8338km are not. A great number of roads remain unpaved to this day, mostly little used rural roads. The road speed limits are 50km/h in towns, 80km/h on gravel country roads and 90km/h is the limit on hard-surfaced roads. 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 1337km long with one lane in each direction, except near larger towns and cities and in the Hvalfjörður Tunnel 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 48km to the west of Reykjavík. Domestic flights, flights to Greenland and the Faroe Islands 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 100km east of Reykjavík, dedicated exclusively to gliding. There are a number of airlines that fly to and from Iceland regularly, and finding flights should not be hard.
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, with most of the remainder from 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 station.
Icelanders emit 6.29 tonnes of CO2 in 2009 equivalent of greenhouse gases per capita. 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 energy.
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.
See also: Education in Iceland.
The Ministry of Education, Science and Culture is responsible for the policies and methods that schools must use, and they issue the National Curriculum Guidelines. However, the playschools and the primary and lower secondary schools are funded and administered by the municipalities.
Nursery school, or leikskóli, is non-compulsory education for children younger than six years, and is the first step in the education system. The current legislation concerning playschools was passed in 1994. They are also responsible for ensuring that the curriculum is suitable so as to make the transition into compulsory education as easy as possible.
Compulsory education, or grunnskóli, comprises primary and lower secondary education, which often is conducted at the same institution. Education is mandatory by law for children aged from 6 to 16 years. The school year lasts nine months, beginning between 21 August and 1 September, ending between 31 May and 10 June. The minimum number of school days was once 170, but after a new teachers' wage contract, it increased to 180. Lessons take place five days a week. All public schools have mandatory education in Christianity although exemption may be considered by the Minister of Education. The Programme for International Student Assessment, coordinated by the OECD, currently ranks the Icelandic secondary education as the 27th in the world, significantly below the OECD average.
Upper secondary education, or framhaldsskóli, follows lower secondary education. These schools are also known as gymnasia in English. It is not compulsory, but everyone who has had a compulsory education has the right to upper secondary education. This stage of education is governed by the Upper Secondary School Act of 1996. All schools in Iceland are mixed sex schools. The largest seat of higher education is the University of Iceland, which has its main campus in central Reykjavík. Other schools offering university-level instruction include Reykjavík University, University of Akureyri and Bifröst University.
The original population of Iceland was of Nordic and Gaelic origin. This is evident from literary evidence dating from the settlement period as well as from later scientific studies such as blood type and genetic analyses. One such genetics study has indicated that the majority of the male settlers were of Nordic origin while the majority of the women were of Gaelic origin.
Iceland has extensive genealogical records dating back to the late 17th century and fragmentary records extending back to the Age of Settlement. The biopharmaceutical company deCODE genetics has funded the creation of a genealogy database which attempts to cover all of Iceland's known inhabitants. It sees the database, called Íslendingabók, as a valuable tool for conducting research on genetic diseases, given the relative isolation of Iceland's population.
The population of the island is believed to have varied from 40,000–60,000 in the period from initial settlement until the mid-19th century. During that time, cold winters, ashfall from volcanic eruptions, and bubonic plagues adversely affected the population several times. According to Bryson (1974), there were 37 famine years in Iceland between 1500 and 1804. The first census was carried out in 1703 and revealed that the population was then 50,358. After the destructive volcanic eruptions of the Laki volcano during 1783–84 the population reached a low of about 40,000. Improving living conditions have triggered a rapid increase in population since the mid-19th century—from about 60,000 in 1850 to 320,000 in 2008.
|Source: Statistics Iceland|
In December 2007, 33,678 people (13.5% of the total population) living in Iceland had been born abroad, including children of Icelandic parents living abroad. 19,000 people (6% of the population) held foreign citizenship. Polish people make up the far largest minority nationality (see table on the right for more details), and still form the bulk of the foreign workforce. About 8,000 Poles now live in Iceland, 1,500 of them in Reyðarfjörður where they make up 75% of the workforce who are building the Fjarðarál aluminium plant. The recent surge in immigration has been credited to a labour shortage because of the booming economy at the time, while restrictions on the movement of people from the Eastern European countries that joined the EU / European Economic Area in 2004 have been lifted. Large-scale construction projects in the east of Iceland (see Kárahnjúkar Hydropower Project) have also brought in many people whose stay is expected to be temporary. Many Polish immigrants were also considering leaving in 2008 as a result of the Icelandic financial crisis.
The southwest corner of Iceland is the most densely populated region. It is also the location of the capital Reykjavík, the northernmost capital in the world. The largest towns outside the Greater Reykjavík area are Akureyri and Reykjanesbær, although the latter is relatively close to the capital.
Some 500 Icelanders under the leadership of Erik the Red colonized Greenland among the existing paleo-Eskimo inhabitants in the late 10th century. The total population reached a high point of perhaps 5,000 and developed independent institutions before disappearing by 1500. From Greenland the Norsemen launched expeditions to settle in Vinland, but these attempts to colonise North America were soon abandoned in the face of hostility from the indigenous peoples. Emigration to the United States and Canada began in the 1870s. Today, Canada has over 88,000 people of Icelandic descent. There are more than 40,000 Americans of Icelandic descent according to the 2000 US census.
Iceland's 10 most populous urban areas:
See also: Icelandic name.
Iceland's official written and spoken language is Icelandic, a North Germanic language descended from Old Norse. It has changed less from Old Norse than the other Nordic languages, has preserved more verb and noun inflection, and has to a considerable extent developed new vocabulary based on native roots rather than borrowings from other languages. It is the only living language to retain the runic letter Þ. The closest living language to Icelandic is Faroese. Icelandic Sign Language was officially recognised as a minority language in 2011. In education, its use for Iceland's deaf community is regulated by the National Curriculum Guide.
English is widely spoken as a secondary language. Danish is also widely understood and spoken. Studying both languages is a part of the compulsory school curriculum. Other commonly spoken languages are Faroese, German, Norwegian and Swedish. Danish is mostly spoken in a way largely comprehensible to Swedes and Norwegians—it is often referred to as skandinavíska (i. e. Scandinavian) in Iceland.
Rather than using family names, as is the custom in all mainland European nations, the Icelanders use patronymics or matronymics. The patronymic and matronymic follows the person's given name, e.g. Elísabet Jónsdóttir ("Elísabet, Jón's daughter") or Ólafur Katrínarson ("Ólafur, Katrín's son"). Consequently, the Icelandic telephone directory is listed alphabetically by first name rather than by surname.
See main article: Religion in Iceland.
Icelanders enjoy freedom of religion under the constitution of Iceland, though the Church of Iceland, a Lutheran body, is the state church. The National Registry keeps account of the religious affiliation of every Icelandic citizen. In 2005, Icelanders were divided into religious groups as follows:
The remaining 2.9% includes around 20–25 other Christian denominations while around 1% belong to non-Christian religious organisations. There is a small Muslim community of between 370 and 600 mostly in Reykjavík. There are about 30 - 50 Jews living in Iceland. The largest non-Christian denomination is Ásatrúarfélagið, a neopagan group.
Religious attendance is relatively low,  as in the other Nordic countries. The above statistics represent administrative membership of religious organisations which does not necessarily closely reflect the belief demographics of the population of Iceland. According to a study published in 2001, 23% of the inhabitants are either atheist or agnostic.
See main article: Culture of Iceland.
Icelandic culture has its roots in Norse traditions. Icelandic literature is popular, in particular the sagas and eddas which were written during the High and Late Middle Ages. Icelanders place relatively great importance on independence and self-sufficiency; in a European Commission public opinion analysis over 85% of Icelanders found independence to be "very important" contrasted with the EU25 average of 53%, and 47% for the Norwegians, and 49% for the Danes.
Iceland is progressive in terms of lesbian, gay bisexual and transgendered (LGBT) matters. In 1996, the Icelandic parliament passed legislation to create registered partnerships for same-sex couples, covering nearly all the rights and benefits of marriage. In 2006, by unanimous vote of the parliament, further legislation was passed, granting same-sex couples the same rights as different-sex couples in adoption, parenting and assisted insemination treatment. On 11 June 2010, the Icelandic parliament amended the marriage law, making it gender neutral and defining marriage as between two individuals, thereby legalising same-sex marriage. The law took effect on 27 June 2010. The amendment to the law also means registered partnerships for same-sex couples are now no longer possible, and marriage is their only option—identical to the existing situation for opposite-sex couples.
See main article: Icelandic literature.
Iceland's best-known classical works of literature are the Icelanders' sagas, prose epics set in Iceland's age of settlement. The most famous of these include Njáls saga, about an epic blood feud, and Grænlendinga saga and Eiríks saga, describing the discovery and settlement of Greenland and Vinland (modern Newfoundland). Egils saga, Laxdæla saga, Grettis saga, Gísla saga and Gunnlaugs saga ormstungu are also notable and popular Icelanders' sagas.
A translation of the Bible was published in the 16th century. Important compositions since the 15th to the 19th century include sacred verse, most famously the Passion Hymns of Hallgrímur Pétursson, and rímur, rhyming epic poems. Originating in the 14th century, rímur were popular into the 19th century, when the development of new literary forms was provoked by the influential, National-Romantic writer Jónas Hallgrímsson. In recent times, Iceland has produced many great writers, the best-known of which is arguably Halldór Laxness who received the Nobel Prize in Literature in 1955. Steinn Steinarr was an influential modernist poet.
See main article: Icelandic art. The distinctive rendition of the Icelandic landscape by its painters can be linked to nationalism and the movement to home rule and independence, which was very active in this period.
Contemporary Icelandic painting is typically traced to the work of Þórarinn Þorláksson, who, following formal training in art in the 1890s in Copenhagen, returned to Iceland to paint and exhibit works from 1900 to his death in 1924, almost exclusively portraying the Icelandic landscape. Several other Icelandic men and women artists studied at Royal Danish Academy of Fine Arts at that time, including Ásgrímur Jónsson, who together with Þórarinn created a distinctive portrayal of Iceland's landscape in a romantic naturalistic style. Other landscape artists quickly followed in the footsteps of Þórarinn and Ásgrímur. These included Jóhannes Kjarval and Júlíana Sveinsdóttir. Kjarval in particular is noted for the distinct techniques in the application of paint that he developed in a concerted effort to render the characteristic volcanic rock that dominates the Icelandic environment. Einar Hákonarson is an expressionistic and figurative painter who by some is considered to have brought the figure back into Icelandic painting. In the 1980s, many Icelandic artists worked with the subject of the new painting in their work.
In the recent years artistic practice has multiplied, and the Icelandic art scene has become a setting for many large scale projects and exhibitions. The artist run gallery space Kling og Bang, members of which later ran the studio complex and exhibition venue Klink og Bank has been a significant portion of the trend of self-organised spaces, exhibitions and projects. The Living Art Museum, Reykjavík Municipal Art Museum, Reykjavik Art Museum and the National Gallery of Iceland are the larger, more established institutions, curating shows and festivals.
See main article: Music of Iceland.
Icelandic music is related to Nordic music, and includes vibrant, folk and pop traditions, including medieval music group Voces Thules, alternative rock band The Sugarcubes, jazzfusionband Mezzoforte, singers Björk and Emilíana Torrini, and post-rock band Sigur Rós. The national anthem of Iceland is Lofsöngur, written by Matthías Jochumsson, with music by Sveinbjörn Sveinbjörnsson.
Traditional Icelandic music is strongly religious. Hallgrímur Pétursson wrote many Protestant hymns in the 17th century. Icelandic music was modernised in the 19th century, when Magnús Stephensen brought pipe organs, which were followed by harmoniums.
Other vital traditions of Icelandic music are epic alliterative and rhyming ballads called rímur. Rímur are epic tales, usually a cappella, which can be traced back to skaldic poetry, using complex metaphors and elaborate rhyme schemes. The best known rímur poet of the 19th century was Sigurður Breiðfjörð (1798–1846). A modern revitalisation of the tradition began in 1929 with the formation of the organisation Iðunn.
Icelandic contemporary music consists of a big group of bands, ranging from pop-rock groups such as Bang Gang, Quarashi and Amiina to solo ballad singers like Bubbi Morthens, Megas and Björgvin Halldórsson. Independent music is also very strong in Iceland, with bands such as múm, Sugarcubes, HAM, Sigur Rós (of which lead singer Jón Þór Birgisson also has prominent success with bands Jónsi and Jónsi & Alex), as well as solo artists Emilíana Torrini and Mugison being fairly well known outside Iceland. In addition, also icelandic jazzmusicians and jazzrelated bands have earned reputation outside Iceland. Most knowned is perhaps the jazzfusionband Mezzoforte.
Many Icelandic artists and bands have had great success internationally, most notably Björk and Sigur Rós but also Quarashi, Hera, Ampop, Mínus and múm. The main music festival is arguably Iceland Airwaves, an annual event on the Icelandic music scene, where Icelandic bands along with foreign ones occupy the clubs of Reykjavík for a week.
Electronic music has risen highly amongst the Icelanders, with producers like Thor and GusGus. Significant experimental electronic music producers from Iceland include multi-media artist Runar Magnusson (now based in Denmark) and laptop trio Stillupsteypa, whose members Sigtriggur Berg Sigmarsson and Heimir Björgúlfsson are also active as solo composers and visual artists.
Iceland's largest television stations are the state-run Sjónvarpið and the privately owned Stöð 2, SkjárEinn and ÍNN. Smaller stations exist, many of them local. Radio is broadcast throughout the country, including some parts of the interior. The main radio stations are Rás 1, Rás 2, X-ID977 and Bylgjan. The daily newspapers are Morgunblaðið and Fréttablaðið. The most popular websites are the news sites Vísir and Mbl.is.
Iceland is home to LazyTown (Icelandic: Latibær), a children's television programme created by Magnús Scheving. It has become a very popular programme for children and adults and is shown in over 100 countries, including the UK, the Americas and Sweden. The LazyTown studios are located in Garðabær.
In 1992 the Icelandic film industry achieved its greatest recognition hitherto, when Friðrik Þór Friðriksson was nominated for the Academy Award for Best Foreign Language Film for his film, Children of Nature. Actress Guðrún S. Gísladóttir, who is Icelandic, played one of the major roles in fabled Russian filmmaker Andrei Tarkovsky´s 1986 film, The Sacrifice. Anita Briem, known for her performance in Showtime's The Tudors, is also Icelandic. Briem starred in the 2008 film Journey to the Center of the Earth, which shot scenes in Iceland. The 2002 James Bond movie, Die Another Day is set for a large-part in Iceland.
On 17 June 2010, the parliament passed a resolution proposing the government draft legislation protecting the free speech rights and identity of journalists and whistleblowers, the strongest journalist protection law in the world.
CCP Games's (developers of EVE Online and Dust 514) headquarters is based in Reykjavik. CCP Games hosts the third most populated MMO in the world which also has the largest total game area for an online game. EVE Online has won multiple game awards and is notorious for its extreme learning curve.
Much of Iceland's cuisine is based on fish, lamb, and dairy products. Þorramatur is a selection of traditional cuisine consisting of many dishes, and is usually consumed around the month of Þorri, which begins on the first Friday, after 19 January. Traditional dishes also include skyr, hákarl (cured shark), cured ram, singed sheep heads, and black pudding.
See main article: Sport in Iceland.
Popular sports include association football, track and field, handball and basketball. Handball is often referred to as the national sport, and Iceland's team is one of the top-ranked teams in the world. Icelandic women do well at football relative to the size of the country, the national team ranked 16th by FIFA. Iceland has excellent conditions for skiing, snowboarding, ice climbing and rock climbing (much of the volcanic rock is, however, too brittle), although mountain climbing and hiking are preferred by the general public. Iceland is also a world-class destination for alpine ski touring and Telemark skiing with the Troll Peninsula in Northern Iceland being the centre of activity. Iceland also has the most World's Strongest Man competition wins, with eight titles shared evenly between Magnús Ver Magnússon and Jón Páll Sigmarsson.
The oldest sport association in Iceland is the Reykjavík Shooting Association, founded in 1867. Rifle shooting became very popular in the 19th century and was heavily encouraged by politicians and others pushing for Icelandic independence. Shooting remains popular and all types of shooting with small arms are practised in the country.