History

Overview

Iceland was settled by the Norse in the 9th century, and became the seat of the world's oldest parliament, the Althing in the 10th century. The country united with Norway in 1262, and with Denmark in 1380. In 1918, Iceland became an independent kingdom, sharing a sovereign with Denmark, before becoming an independent republic in 1944. The extension of the fishing limit around Iceland in 1958 and 1975 precipitated the 'Cod War' disputes with the UK.

Early History

Iceland is, in geological terms, a young island. It started to form about 20 million years ago from a series of volcanic eruptions on the Mid-Atlantic ridge. The oldest rock samples found in Iceland date back 16 million years. The Iceland hotspot is likely partly responsible for the island's creation and continued existence.

Iceland remained one of the world's last larger islands uninhabited by humans. It has been suggested that the land called Thule by the Greek merchant Pytheas was actually Iceland, although it seems highly unlikely considering Pytheas' description of it as an agricultural country with plenty of milk, honey and fruit. The exact date that humans first reached the country is uncertain. Roman coins dating to the 3rd century AD have been found in Iceland, but it is unknown whether they were brought there at that time, or came later with Viking settlers, having circulated as currency already for centuries.

There is some literary evidence that Irish monks had settled in Iceland before the arrival of the Norse. However, there is no archaeological evidence to support such settlement. The 12th century scholar Ari Thorgilsson wrote in his book, Islendingabok, that small bells, corresponding to those used by Irish monks, were found by the settlers. No such artefacts have been discovered by archaeologists, however. Some Icelanders claimed descent from Kjarvalr Irakonungr at the time of the Landnamabok's creation.

874-930: Settlement of Iceland

Discovery

According to Landnamabok, Iceland was discovered by Scandinavian sailor Naddoddr, who was sailing from Norway to the Faroe Islands in 850, but got lost and drifted to the east coast of Iceland. Naddoddr named the country Snaeland (Snowland). Swedish sailor Gardar Svavarsson also accidentally drifted to the coast of Iceland in the 860s. He discovered that the country was an island and named it Gardarsholmi (literally Gardar's Islet) and stayed for the winter at Husavik. The first Scandinavian who deliberately sailed to Gardarsholmi was Floki Vilgerdarson, also known as Hrafna-Floki (Raven-Floki). Floki settled for one winter at Bardastrond. It was a cold winter, and when he spotted some drift ice in the fjords he gave the island its current name, Island (Iceland).

The First Settler

The first permanent settler in Iceland is usually considered to be a Norwegian chieftain named Ingolfur Arnarson. According to the story, he threw two carved pillars overboard as he neared land, vowing to settle wherever they landed. He then sailed along the coast until the pillars were found in the southwestern peninsula, now known as Reykjanesskagi. There he settled with his family around 874, in a place he named Reykjavik (Bay of Smokes) due to the geothermal steam rising from the earth. This very place would eventually become the capital and the largest city of modern Iceland. It is recognised, however, that Ingolfur Arnarson may not have been the first one to settle permanently in Iceland - that may have been Nattfari, a slave of Gardar Svavarsson who stayed behind when his master returned to Scandinavia.

It should be noted that all of the above information comes from Landnamabok (Book of Settlement), a book that Icelandic historians mostly eschew as a scholarly source, due to many inconsistencies, but in many ways remains a primary historical source. However, archaeological findings in Reykjavik seem to confirm the date given there: there was a settlement in Reykjavik around 870.

Settlement

Ingolfur was followed by many more Norse chieftains, their families and slaves who settled all the inhabitable areas of the island in the next decades. These people were primarily of Norwegian, Irish and Scottish origin, the Irish and Scots being mainly slaves and servants of the Norse chiefs according to the Icelandic sagas and Landnamabok and other documents. A common explanation for this exodus from Norway is that people were fleeing the harsh rule of the Norwegian king Haraldur Harfagri (Harald the Fair-haired), who is believed to have been uniting some parts of modern Norway during the period. It is also believed that the western fjords of Norway were simply overcrowded in this period. The settlement of Iceland is thoroughly recorded in the aforementioned Landnamabok, although it should be remembered that the book was compiled in the early 12th century when at least 200 years had passed from the age of settlement. Ari Thorgilsson's Islendingabok is generally considered more reliable as a source and is probably somewhat older, but it is far less thorough. It does say that Iceland was fully settled within 60 years, which likely means that all territory had been claimed by various settlers.

930-1262: Icelandic Commonwealth

In 930, the ruling chiefs established an assembly called the Althingi (English: Althing). The parliament convened each summer at Thingvellir, where representative chieftains (Godordsmenn or Godar) amended laws, settled disputes and appointed juries to judge lawsuits. Laws were not written down, but were instead memorised by an elected Lawspeaker (logsogumadur). The Althingi is sometimes stated to be the world's oldest existing parliament. Importantly, there was no central executive power, and therefore laws were enforced only by the people. Such an environment wais very conducive to blood-feuds, which provided the writers of the sagas with plenty of material.

Iceland enjoyed a mostly uninterrupted period of growth in its commonwealth years. Settlements from that era have been found in south-west Greenland and eastern Canada, and Viking sagas, such as Eiriks saga Rauda and Graenlendinga saga, speak of the settlers' exploits.

Christianization of Iceland

The settlers of Iceland were dominantly pagans and worshipped, among others, Odin, Thor and Freyja - but in the 10th century political pressure from Europe to convert to Christianity mounted. As the end of the millennium grew near, many prominent Icelanders had accepted the new faith. In the year 1000, as a civil war between the religious groups seemed possible, the Althing appointed one of the chieftains, Thorgeirr Ljosvetningagodi, to decide the issue of religion by arbitration. He decided that the country should convert to Christianity as a whole - but pagans were allowed to worship secretly. The first Icelandic bishop, Isleifr Gizurarson, was consecrated by bishop Adalbert of Bremen in 1056.

Civil War and the End of the Commonwealth

As the 11th and 12th centuries passed, the centralisation of power had worn down the institutions of the Commonwealth, as the former, notable independence of local farmers and chieftains gave way to the growing power of a handful of families and their leaders. The period from ca. 1200 - 1262 is generally known as Sturlungaold - The Age of the Sturlungs. This refers to Sturla Thordarson and his sons: Thordur, Sighvatur and Snorri. They were one of two main clans fighting for power over Iceland, causing havoc in a land comprised almost entirely of farmers who could ill afford being away from their farms to travel across the land, fighting for their leader's cause. In 1220, Snorri Sturluson became a vassal of Hakon, King of Norway, and subsequently his nephew Sturla Sighvatsson also became a vassal in 1235. Sturla used the power and influence of the Sturlungar family to wage war against the other clans in Iceland. After decades of conflict, the Icelandic chieftains agreed to accept the sovereignty of Norway and signed the Gamli sattmali (Old Covenant), establishing a union with the Norwegian monarchy.

1262-1944: Iceland under Norwegian and Danish Kings

Little changed in the decades following the treaty. Norway's consolidation of power in Iceland was slow, and the Althing intended to hold onto its legislative and judicial power. Nonetheless, the Christian clergy had unique opportunities to accumulate wealth via the tithe, and power gradually shifted to ecclesiastical authorities as Iceland's two bishops in Skalholt and Holar acquired land at the expense of the old chieftains.

Iceland remained under Norwegian kingship until 1380, when the Royal House of Norway died out. Iceland and Norway came under the control of the Danish Crown. Unlike Norway, Denmark did not need Iceland's fish and homespun wool. This created a dramatic deficit in Iceland's trade, and as a result, no new ships for continental trading were built. The small Greenland colony, established in the late 10th century, died out completely before 1500, perhaps due to a lack of resources that were normally provided by Iceland.

With the introduction of absolute monarchy in Denmark in 1660, the Icelanders relinquished their autonomy to the crown, including the right to initiate and consent to legislation.

Reformation

By the middle of the 16th century, Christian III of Denmark began to impose Lutheranism on his subjects. Jon Arason and Ogmundur Palsson, the Catholic bishops of Skalholt and Holar respectively, opposed the King's religious reformation. Ogmundur was deported by Danish officials in 1541, but Jon Arason put up a fight. Opposition to the reformation ended in 1550 when agents of the Danish king captured and beheaded Jon and his two sons in Skalholt. After that, Iceland became Lutheran, and remains largely so to this day.

In 1602, Iceland was forbidden to trade with other countries than Denmark, by order of the Danish Government. The Danish trade monopoly would remain in effect until 1854.

The Independence Movement

In the 18th century, climatic conditions in Iceland reached an all-time low since the original settlement. On top of this, the Laki volcano in Iceland erupted in 1783, spitting out three cubic miles (12.5 cubic km) of lava. Floods, ash, and fumes wiped out 9,000 people and 80% of the livestock. The ensuing starvation killed a quarter of Iceland's population. This period is known as the Mist Hardship (Icelandic: Moduhardindin).

When the two kingdoms of Denmark and Norway were separated by the Treaty of Kiel in 1814, following the Napoleonic Wars, Denmark kept Iceland as a dependency.

Throughout the 19th century, the country's climate continued to grow worse, resulting in mass emigration to the New World, particularly Manitoba, Canada. However, a new national consciousness was revived in Iceland, inspired by romantic and nationalist ideologies from mainland Europe. An independence movement developed under Jon Sigurdsson. The Althing had remained for centuries as a judicial body but was finally abolished in 1800. In 1843, a new body by the same name was founded as a consultative assembly and claimed continuity with the Althing of the Icelandic Commonwealth.

Home Rule and Sovereignty

In 1874, a thousand years after the first acknowledged settlement, Denmark granted Iceland home rule, which again was expanded in 1904. The constitution, written in 1874, was revised in 1903, and a minister for Icelandic affairs, residing in Reykjavik, was made responsible to the Althing. The Act of Union, a December 1, 1918, agreement with Denmark, recognised Iceland as a fully sovereign state united with Denmark under a common king. Iceland established its own flag and asked that Denmark represent its foreign affairs and defence interests. The Act would be up for revision in 1940 and could be revoked three years later, if an agreement wasn't reached.

World War II and the Establishment of the Republic

German occupation of Denmark on April 9, 1940, severed communications between Iceland and Denmark. As a result, on April 10, the Parliament of Iceland, Althingi, elected to take control of foreign affairs, electing a provisional governor, Sveinn Bjornsson, who later became the republic's first president. During the first year of World War II, Iceland strictly enforced a position of neutrality, taking action against both British and German forces violating the laws of neutrality. On May 10, 1940, Operation Fork was launched and British military forces began an invasion of Iceland by sailing into Reykjavik harbour. The government of Iceland issued a protest against what it called a "flagrant violation" of Icelandic neutrality. On the day of the invasion, Prime Minister Hermann Jonasson read a radio announcement telling Icelanders to treat the British troops with the politeness due to guests. The Allied occupation of Iceland would last throughout the war.

At the peak of their occupation of Iceland, the British had around 25,000 troops stationed in Iceland, all but eliminating unemployment in the Reykjavik area and other strategically important places. In July 1941, responsibility for Iceland's defence passed to the United States under a U.S.-Icelandic defence agreement. The British needed all the forces they could muster closer to home and, thus, coerced the Althingi into agreeing to an American occupation force. Up to 40,000 soldiers were stationed on the island, outnumbering all grown Icelandic men. (At the time, Iceland had a population of around 120,000.)

Following a plebiscite, Iceland formally became an independent republic on June 17, 1944. Since Denmark was still occupied by Nazi Germany, many Danes felt offended that the step should have been taken at this time. Despite this, the Danish king, Christian X, sent a message of congratulations to the Icelandic people.

1944 - Present: Independent Iceland

Iceland had prospered during the course of the war, amassing considerable currency reserves in foreign banks. The government, led by an unlikely three-party majority cabinet made up of conservatives (Sjalfstaedisflokkurinn), social democrats (Althyduflokkurinn) and socialists (Sosialistaflokkurinn), decided to put the funds into a general renovation of the fishing fleet, the building of fish processing facilities, and a general modernisation of agriculture. These actions were aimed at keeping Icelanders' standard of living as high as it had become during the prosperous war years.

The government's fiscal policies were strictly Keynesian, and their aim was to create the necessary industrial infrastructure for a prosperous industrialised country. It was considered essential to keep unemployment down to an absolute minimum and to protect the export industry, i.e. the fishing industry, by manipulation of the currency and other means. Due to the country's dependence both on unreliable fish catches and foreign demand for fish products, Iceland's economy remained very unstable well into the 1990s, when the country's economy was greatly diversified.

NATO Membership

In October 1946, the Icelandic and United States' governments agreed to terminate US responsibility for the defence of Iceland, but the United States retained certain rights at Keflavik, such as the right to re-establish a military presence there, should war threaten.

Amidst domestic controversy and riots in front of the house of parliament, Iceland became a charter member of the North Atlantic Treaty Organisation on March 30, 1949, with the reservation that it would never take part in offensive action against another nation. After the outbreak of hostilities in Korea in 1950, and pursuant to the request of NATO military authorities, the United States and Althingi agreed that the United States should again take responsibility for Iceland's defence. This agreement, signed on May 5, 1951, was the authority for the controversial US military presence in Iceland, which remained until 2006.

The Cod Wars

The Cod Wars were a series of conflicts between Iceland and the United Kingdom from the late 1950's to the mid-1970's. The first Cod War took place in 1958 when Britain was unable to prevent Iceland from extending its fishing limits from 4 to 12 miles (7 to 22 km) off the coast of Iceland. The second Cod War lasted from 1972 to 1973, when Iceland extended the limit to 50 miles (93 km). The third Cod War began in November 1975, when Iceland extended its zone of control over fishing from 50 miles to 200 miles (370 km). Great Britain did not recognise Iceland's authority in the matter and continued to fish inside the disputed area, marking the third time that Iceland and Great Britain had clashed over fishing rights. Iceland deployed a total of eight ships: six Coast Guard vessels and two Polish-built stern trawlers, to enforce her control over fishing rights. In response, Great Britain deployed a total of twenty-two frigates, seven supply ships, nine tug-boats and three auxiliary ships to protect its 40 fishing trawlers. While few shots were fired during the seven-month conflict, several ships were rammed on both sides, causing damage to the vessels and a few injuries to the crews.

Events took a more serious turn occurred when Iceland threatened closure of the US-manned NATO base at Keflavik, which, in the military perception of the time, would have severely impaired NATO's ability to defend the Atlantic Ocean from the Soviet Union. As a result, the British government agreed to have its fishermen stay outside of Iceland's 200 mile (370 km) exclusion zone without a specific agreement.

EEA Membership

In 1991, the Independence party, led by David Oddsson, formed a coalition government with the Social Democrats. This government set in motion market liberalisation policies, privatising a number of small and large companies. At the same time economic stability increased and previously chronic inflation was drastically reduced. Iceland became a member of the European Economic Area in 1994

Economic Reform

In 1995, the Independence Party formed a coalition government with the Progressive Party. This government continued with the free market policies, privatising two commercial banks and the state-owned Siminn. Corporate incomes tax was reduced to 18% (from around 50% at the beginning of the decade), inheritance tax was greatly reduced and the net wealth tax abolished. A system of individual transferable quotas in the Icelandic fisheries, first introduced in the late 1970s, was further developed. The coalition government held on to power after relatively successful elections in 1999 and 2003. In 2004, David Oddsson stepped down as Prime Minister after 13 years in office. Halldor Ásgrimsson, leader of the Progressive Party, took over as Prime Minister from 2004 to 2006, followed by Geir H. Haarde, David Oddsson's successor as leader of the Independence Party.

After a temporary recession in the early 1990s, economic growth has been considerable, about 4% per year on average from 1994, and Iceland is now one of the wealthiest countries in the world according to OECD statistics. The governments of the 1990s and 2000s have adhered to a controversial but staunch pro-US foreign policy, lending nominal support to the NATO action in the Kosovo War and signing up as a member of the Coalition of the willing during the 2003 invasion of Iraq.

Recent History

In March 2006, the United States announced that it intended to withdraw the greater part of the Icelandic Defence Force. On the 12th of August 2006, the last four F-15s left Icelandic airspace. The United States closed the Keflavik base in September 2006.

Following elections in May 2007, the Independence Party headed by Geir H. Haarde remained in government, albeit in a new coalition with the Social Democratic Alliance.