Icelandic language:  thanks to centuries of comparative isolation, the Icelandic language remains very much that of Old Norse, the Germanic language spoken by the Vikings who migrated from Norway to settle Iceland in the 9~11th centuries, with complex grammatical rules for case endings. The written language has changed little since the 13th century, enabling modern readers to understand the Sagas which were written at that time. The Icelandic alphabet has 32 letters, and is the only modern language to retain the old runic symbols of ð/Ð ('eth' pronounced as a hard 'th' as in 'that') and þ/Þ ('thorn' pronounced as a soft 'th' as in 'thing'). There is a strong lobby in Iceland to maintain what is seen as linguistic purity by resisting foreign loan-words, and an academic committee has coined curious neologisms from existing Icelandic words to cover modern scientific or technological terms; eg simi (literally 'long thread') for telephone, farsimi (literally 'travelling long thread') for mobile phone, tölva (literally 'number prophetess') for computer, þyrla (literally 'whirler') for helicopter, þota (literally 'zoomer') for jet aircraft.

Icelandic people and population:  modern Icelanders are primarily descended from the original Norse Viking settlers and Celtic peoples who were brought as spouses or slaves from earlier settlements in Northern Britain and Ireland. Iceland's current total population is just 350,000 and with its land area at 103,000 square kms, this makes Iceland one of Europe's most sparsely populated countries with an average 3 inhabitants per square km. Two thirds of this population however live in the area around the capital Reykjavík. With tourism now more important for the national economy than fishing, Iceland is overwhelmed each year by almost 1 million tourists. Icelandic names use patronymics based on a combination of father's forename plus the suffix 'son' or 'dóttir' (daughter): so Jón Einarsson has a son Ólafur whose name will therefore become Ólafur Jónsson; his daughter Sigríður will be named Sigríður Jónsdóttir. Icelanders formally address others by their forenames; even the telephone directory is listed by first names.

HISTORY OF ICELAND:

Early Viking Settlement:  the Greek geographer Pytheas of Massalia (Marseilles) is said to have explored NW Europe around 325 BC and, although his writings have not survived, he described an island in the ocean 6 days sail north of Britain named as Ultima Thule. This End-of-the-Earth island remained clouded in mystery until the 8th century AD when Irish monks, who had already colonised the Faroes, settled on the SE coast of Iceland, seeking further solitude and seclusion. The accounts of one of these Papar (Fathers) spoke of a land with no daylight in winter and 24 hours daylight in summer. The Irish Papar were driven out when Viking adventurers began to explore the Icelandic SW coastline in the early 9th century. Driven from their home country of Norway by political feuds and land shortages to seek their fortunes overseas, these Viking freebooters had already raided Britain and Ireland in the 790s. One of these Viking adventurers, Garðar Svavarsson circumnavigated Iceland in 860 AD, over-wintering near modern-day Húsavík; around this time another Viking Flóki Vilgerðarson's attempts to colonise were defeated by winter ice and he named the country Ísland before returning to Norway. Attracted by the prospect of endless free land, 2 other Vikings, Ingólfur Arnason and his blood-brother Hjörleifur Hröðmarsson, who had lost their lands in Norway for killing a chieftain's sons, set sail for Iceland in 870 with their households and belongings intending to settle there permanently. In true Viking tradition on reaching a new country, when they came within sight of land, Ingólfur threw overboard his 'seat posts' (setstokka), his symbols of authority as head of household, and vowed to found his new settlement wherever the gods washed them up. The posts were found in a SW bay and there Ingólfur built his homestead in 874, naming the place Reykjavík (Smokey Bay) after the steam rising from hot springs. The next 60 years Age of Settlement (Landnám) saw increasing numbers of Norwegian Viking emigrants establishing farms in Iceland, bringing with them their sheep, horses and crops like barley and their pagan beliefs, and clearing forests to create pastures and provide timber for homes and ships. Landowners became local chieftains who arbitrated in disputes by negotiation at regional gatherings (Þing). Conditions must have been favourable compared with those back in Norway since by 930 when the last areas of land were claimed, some 60,000 already lived in Iceland, a figure not exceeded until the 19th century.

The Commonwealth under the Alþing, and conversion to Christianity (930~1262 AD):  by the early 10th century, Iceland was firmly established as an independent nation with landowner-chieftains continuing to meet at regional assemblies to trade and settle disputes. But some form of national government was needed. Rejecting the oppressive concept of paramount leader or monarch as experienced in Norway, the Icelandic chieftains decided on a Commonwealth (Þjóðveldið) governed by a national assembly (Alþing). Úlfljótur the lawyer was sent to study Norway's law code and prepare something similar for Iceland, and in 930 AD, the Alþing began its annual 2 week summer gatherings on the plain at Þingvellir, with Þorsteinn Ingólfsson given the honorary title of Allsherjargoði (Supreme Chieftain). The gathering was presided over by the Lögsögumaður (Law Speaker) who recited the country's legal code and, along with the 48 Goðar (chieftains), held legislative power. Disputes were settled by regional courts and a supreme court established early in the 11th century, with fines paid to the injured party or family and the highest punishment being exile from the country as an outlaw. According to Erik the Red's Saga (see left), one of those outlawed for killing a neighbour was Eríkur Þorvaldsson (Erik the Red) who sailed into exile from the West Fjords in search of rumoured land to the NW. He discovered a barren, treeless coastline and returned to Iceland to recruit colonists to settle the place which he called Greenland to attract interest. 2 colonies were founded in Western Greenland which lasted until finally driven out by the Inuit in 16th century. It was from Greenland that Erik's son Leifur Eríksson set out around 1000 AD to explore reported land even further to the west. Attempted settlements of Vinland, an unidentified location somewhere along the north American coast named after the wild vines discovered there, were driven out by native American Indians, and America had to wait 500 years until European rediscovery by Christopher Columbus in 1492. The first century of the Commonwealth was regarded as a golden age: the new parliamentary and judicial systems were largely successful, the country was settled and united, farming profitable and resources plentiful. The first generations of Icelanders were carving out great names for themselves in events which passed into oral lore and were later written down as the Sagas.

Norway converted to Christianity in the late 10th century under King Olaf Tryggvason who then, with land grabbing in mind, extended his brutal evangelising zeal to Iceland through his ruthless missionary Þangbrand. At the annual Alþing of 1000 AD, civil war between Icelandic pagan and Christian factions was only averted by the Law Speaker Þorgeir. With utmost diplomacy Þorgeir persuaded the rival factions to accept his judgement once he had pondered the issue for a day and a night; he decreed that Iceland should convert to the new religion with pagans such as himself allowed to practise their religion in private. This compromise gave the formerly divided groups a semblance of national unity, and the first Icelandic bishoprics were established in 1056 at Skáholt near Þingvellir and in 1106 at Hólar in the north. The new religion brought important changes with the introduction of tithes (property taxes), and as the church's wealth increased, monasteries and schools were founded bringing education and the beginnings of literacy. The 12th century began the Saga Age when the epic tales of early settlement, family feuds, romance and tragedy were recorded by scholars. In 1130 the church commissioned the compilation of the Íslendingabók (see right), a historical narrative of the Settlement Age and lineage of the Icelandic people, written by Ari Þorgilsson not in Latin, the usual language of educated people at that time, but in native Icelandic.

Collapse of the Commonwealth into the anarchy of the Sturlung Age (13th century):  despite such cultural developments, by the early 13th century Icelandic society was declining after 200 years of enlightened peace. Life became more arduous: eruptions of the Hekla volcano polluted farmland with ash, tree felling stripped the land of ship- and home-building timber, the effects of consequent soil erosion were compounded by over-grazing, and the reduction in available farmland increased dependence on food imports. Land ownership, wealth and political power were concentrated in the hands of a new aristocratic elite of a few clans, with resultant constant power struggles and violent feuds between rival chieftains. Enriched by tithes, the Icelandic Church's political power increased, and when it fell under the jurisdiction of the Norwegian Archbishop of Nidaros at Trondheim, this gave the expansionist Norwegian throne a lever to pressure Iceland into accepting its authority. The country descended into anarchy , and this dark hour in Iceland's history during the early~mid 13th century became known as the Sturlung Age after the Sturlungar, the most powerful of the aristocratic families whose most influential member was Snorri Sturluson the historian, poet, and wily politician. The Alþing's lack of effective control became clear as it proved impotent to cope with the crisis of feuding between the 6 most powerful clans as they battled for political supremacy, the Church's expanding power and demands for freedom from secular law, and pressure from the Norwegian throne to accept its authority. To achieve lasting peace amid the chaos of civil conflict, the Icelanders had no other choice but to accept Norwegian sovereignty. In 1262 the Icelandic chieftains signed the Gamli sáttmáli (Old Covenant) which effectively placed Iceland under union with Norway. Although Iceland nominally retained her legal code, the Norwegian throne exercised real power; this marked the beginning of 7 centuries of foreign rule of Iceland.

Norwegian rule, followed by Danish rule (14~15th centuries):  Norway immediately replaced the chieftains with its own nominees as government officials and began appointing Norwegian Bishops and imposing excessive taxation. In 1281 a new constitution, the Jónsbók was introduced under which the country was overseen by a governor with 12 regional sheriffs acting as local administrators; all were Icelanders but appointed by Norway. The Alþing continued to meet annually as a national court but with limited powers and decisions approved by the King. The new regime should have brought stability, but corruption was rife as officials abused their position and former chieftains contended for high office. In the late 14th century, following a period of dynastic feuding, the weak Norwegian King Håkon VI married the shrewd Danish Queen Margrethe I (see left) who in 1397 engineered the Kalmar Union which unified the kingdoms of Denmark and Norway and its overseas dependencies including Iceland; control of Iceland now passed to the Danish throne and Denmark continued to rule the country until 1918. The 14th century had brought natural disasters to Iceland: severe winters wiped out crops and Hekla together with the volcano under Öræfajökull erupted covering a third of the countryside with ash. But most devastating, the Black Death, which had plagued Europe during the 14th century, reached Iceland in 1402 killing half the population. The demand for dried cod in Europe brought new trading opportunities for the Icelanders; fishing thrived and dried fish became a major export commodity. English and German vessels vied for trade, and the English established a trading post in the Westman Islands. Concerned at England's increasing influence in Iceland and the loss of taxes due to uncontrolled trade, Denmark tried to ban the English from Icelandic waters and encouraged the Hanseatic League to set up trading bases. The English responded with force securing the right to trade providing tolls were paid to Denmark, but after a 1532 clash between English and German ships at Grinsvik, English involvement with Iceland declined leaving Icelandic trade in the hands of Danish and German interests.

The Reformation (16th century):  the Church, which by now had total jurisdiction over land ownership and profitable stakes in faming and fishing, gained even more power in 1533 when its 2 bishops were appointed as Iceland's joint governors. But across Europe Lutheranism was gaining greater influence, encouraging revolt against the Catholics' growing obsession with material profits rather than spiritual well-being. European monarchs were attracted by a break with Rome, seeing the opportunity to get their hands on the Church's riches and lands. During the 1530s all of Scandinavia became Lutheran and Iceland gained a number of converts even though threatened with excommunication by the bishops. In 1539 the Danish King Christian III (see right) ordered the appropriation of Church lands by the Icelandic governor, leading to the murder of one of the sheriffs and a military expedition to Iceland to enforce conversion to Lutheranism. After Danish suppression of an armed revolt, the last of the Catholic bishops was executed, and in 1550 the Lutheran Reformation was imposed on an initially reluctant Icelandic population. The Danish king acquired all Church holdings and their revenues, profits which had previously stayed in Iceland, and monasteries were abolished. Although deprived of funds, making continued sponsorship of education difficult, the Church managed to publish a translation of the Bible in 1584, the first printed book in Icelandic.

The Danish Trade Monopoly and imposition of Danish absolute monarchy (17~18th centuries):  politically the Church was now an instrument of the crown, and as Head of the Church the king gained a more direct control of Iceland. Iceland was technically still independent through its treaty with Norway, but in 1661 King Frederick III declared absolute rule over the entire Danish realm including Iceland and an armed ambassador was sent to Reykjavík to require a swearing of allegiance to the monarch. The Alþing's Law Speaker and Bishop of Skálholt were forced to submit, removing the final vestiges of authority and passing total control of the country to the Danish crown. The Icelandic economy, still based on farming and fishing, suffered a severe blow in 1602 when the Danes imposed a Trade Monopoly: exclusive trading rights in Iceland were confined to a select few Danish merchants who charged high prices for their goods and paid poorly for Icelandic products. By 1700 the Trade Monopoly had crippled the country, creating an impoverished population of tenant farmers and landless labourers. Fishing was also in decline, partly because timber shortage kept ships small and inefficient and no competition for foreign vessels. In an attempt to boost local industry and bypass the embargo on trade, wealthy town magistrate Skúli Magnússon founded weaving, tanning and wool dyeing factories in Reykjavík; his warehouses formed the core of the Reykjavík town, then just a small farming settlement, which would soon become the de facto capital. During the 18th century a further wave of natural disasters hit the country. The worst was the catastrophic 1783~4 Lakagígar eruptions when massive lava flows covered farmland in the SE and toxic fallout wrecked farming across the entire country. The resultant famine reduced the population to just 38,000, and Denmark even considered evacuating the survivors to Jutland. Earthquakes demolished the cathedral at Skálholt and caused subsidence at the Þingvellir Alþing site; the bishopric was moved to Reykjavík and the now totally disempowered Alþing was finally dissolved.

Icelandic Nationalism (19th century):  the increasingly liberal political climate of the early 19th century encouraged the growth of nationalism throughout Europe, and was championed in Iceland by the Icelandic scholar Jón Sigurðsson (see left) who lobbied for restoration of free trade and autonomy from Denmark. Europe's royal families had begun to cede power in order to avoid suffering the same fate as their French counterparts in the French Revolution. Bowing to popular demand, the king reconstituted the Alþing at Reykjavík in 1843, which met every 2 years with 20 elected regional MPs and 6 representatives of the crown; Jón Sigurðsson was one of the first MPs to be elected. By 1848 the Danish monarchy's power was under threat as revolutionary tide swept across Europe, and in Denmark rising expectations of a growing middle class and formation of political parties brought pressure for change. The Danish king Frederick VII signed a new democratic constitution which abolished absolute monarchy, established a 2-chamber parliament elected by popular vote, and an independent judiciary. Denmark moved overnight from autocracy to constitutional monarchy and the beginnings of parliamentary democracy. In Iceland Jón Sigurðsson seized the opportunity to demand that, since Iceland's 1662 oath of allegiance to the king as absolute ruler was no longer valid, the Old Treaty should therefore apply again. He also led the defeat of a bill at the 1851 Alþing that would have legally incorporated Iceland into Denmark. 4 years later he also secured the final lifting of trade restrictions, which did more than anything to improve Icelanders' life by enabling the import of modern farm implements and timber for boat building at reasonable prices and the profitable export of livestock, wool and fish. In 1871 Iceland secured a new constitution, returning full domestic legislative powers to the Alþing, which was ratified by King Christian IX himself while attending celebrations at Þingvellir in 1874 to mark the 1000 year anniversary of the Settlement. This brought further improvement to living standards: the tithe system was abolished, urban development began in what had been a predominantly rural society, infrastructure improved, schooling was made compulsory, improvement in boats and fishing equipment brought the growth of port towns, and farmers formed cooperatives to deal directly with foreign suppliers. But a sizeable growth in population, another volcanic eruption of damaging ash and livestock poisoning gases from Askja, and poor harvests caused by further spates of poor weather, all caused major emigration during the late 19th century to seek a better life in Canada and USA.

Home rule, the Act of Union, and independence (1900~1944):  Jón Sigurðsson died in 1879 before he could realise his ambition of total Icelandic political autonomy from Denmark; his birthday 17 June is celebrated as Iceland's National Day in recognition of his contribution to Icelandic independence. By 1900, differences in approach to achieving this led to the formation of political parties. In 1904 the king was pressured into granting Home Rule under the Home Rule Party led by Hannes Hafstein (see right). His decade in office saw the start of trends which would continue throughout the 20th century: an emerging middle class and gradual shift of population from land to towns, the development of communications with the introduction of telephones in 1906, improvement in technology which boosted output of both farming and fishing, the foundation of the first trade unions, and women being granted equal education rights and enfranchisement in 1905. Hafstein's draft constitution of 1908, which included the proposal to make Iceland an independent state under the Danish king, was initially rejected by the Alþing, but in 1918 following a referendum in which 90% voted in favour of this proposal, Iceland signed the Act of Union under which the country's independence as a sovereign state was recognised, with Denmark still managing foreign affairs, and the Danish king accepted as head of state.

Iceland remained neutral during WW1, profiting from the high export prices paid for fish, meat and wool. As WW2 loomed, with Iceland dependent on trade with both Britain and Germany, the country attempted to maintain her neutrality. Despite this however, once hostilities broke out in 1939, Iceland's strategic north Atlantic position meant that it was simply a matter of time before one of the belligerents invaded. The British were first, landing unopposed in May 1940 in order to secure a vital supply base for Allied North Atlantic operations. The Icelanders had little option but to accept the situation, but ultimately the economy benefited from British and subsequently American construction projects, employment and spending. In July 1941, forces of still officially neutral USA took over occupation of Iceland, with the Alþing's approval on condition that they respected Icelandic sovereignty and left once hostilities were over. The German occupation of Denmark in 1940 prompted the Alþing to declare that, since the king could no longer govern, the Act of Union should be dissolved. With the government in disarray, the formal ratification took some time but Iceland's full independence was finally declared in 1944, with the acting regent Sveinn Björnsson elected as the first President of the Icelandic Republic (see left).

Republic of Iceland (1944 onwards):  one of the biggest challenges for the new Republic came immediately after the war. US forces left in 1946 as required, but as the Cold War began to develop, and with Iceland not having any military defence of its own, the Alþing voted in 1949 that Iceland should join the newly established NATO. Having just rid themselves of 700 years of foreign domination, this decision was highly controversial among Icelanders and caused a riot in Reykjavík. In 1951 the government agreed to allow US forces reoccupy the former airbase at Keflavík, and US military personnel and hardware continued to increase over the next 4 decades, with Iceland serving as a key Cold War monitoring station. Keflavík air base also served as the country's international airport; we recall our arrival there in 1972 and the sight of runways lined with US military jets. The controversial US military presence in Iceland only ended in 2006 when the base at Keflavík finally closed. Since 1944 there have been 6 Presidents of Iceland; the current President elected in 2016 is Guðni Thorlacius Jóhannesson (see right), a politically non-aligned academic historian.

Growth of modern Iceland, an economy based on fishing, and the 1950s~70s Cod Wars:  post-war Iceland transformed itself from one of Europe's poorest countries into a modern, developed society, with 2/3s of the population now living in the Reykjavík conurbation. The Ring Road around the country was completed in 1974 with the bridging of glacial rivers, opening up transport links in the remote SE and encouraging the growth of tourism. Major geothermal and hydro-electric projects were developed, such as the Krafta geothermal power station in the north, Svartsengi power plant near Reykjavík, and the Kárahnjúkar HEP Dam and power plant in the East. The fishing industry had always been vital to Iceland's economy and export earnings, but as commercial fishing picked up during the 1950s the country faced competition for fish stocks from foreign boats. In an attempt to protect its fishing industry, in 1958 Iceland extended its territorial waters exclusion limit for foreign vessels from 3 to 12 miles. Britain protested sending gun boats to protect its trawlers fishing within Iceland's new territorial waters in what became known as the first of the Cod Wars, which flared on and off for the next 30 years. Iceland continued to expand its claims as fish stocks dwindled, and employed its coast guards to cut the cables of foreign vessels caught poaching within the exclusion limits. Matters came to a head in 1975 when Iceland unilaterally asserted a 200 mile exclusion limit; Britain broke off diplomatic relations with Iceland and ordered the Royal Navy to protect its fishing fleet by ramming Icelandic coast guard boats. Shots were fired and boats of both sides rammed, and the situation was only resolved in 1985 when international law recognised Iceland's position by granting the 200 mile limit to all countries involved in the dispute. Dependence on fishing as the main source of export earnings created a very sensitive economy. Quotas were reduced in the early 1990s to allow fish stocks to regenerate after over-fishing, and the industry went into recession leading to higher unemployment and a sharp drop in the króna. But the country slowly began a period of recovery as the fishing industry stabilised, and today, although still sensitive to declining fish stocks, fishing still provides 40% of export earnings, more than 12% of GDP, and employs around 5% of the workforce.

Iceland's economic melt-down, and subsequent recovery (2008~present):  since the late 1990s, Iceland had tried to diversify its economy from over-reliance on fishing by investing in the banking sector. Initially this created high profits and all seemed well; from 2003 the economy was full of confidence with foreign investors pouring money in, tempted by the 15% interest rates that Icelandic banks were applying to counter inflation. But this only brought accelerated inflation and further increases in interest rates, causing the exchange rate to lose touch with economic reality while giving Icelanders an illusion of wealth. The banks continued to buy up foreign assets with liabilities 10 times the country's GDP, meaning that the Icelandic government could not guarantee the banks. Finally in 2008 when the ripples of the worldwide financial crisis reached Iceland, the bubble burst and the economic consequences for Iceland were disastrous: the Icelandic stock market crashed, the króna plummeted losing half its value overnight, inflation soared, all 3 banks went into receivership and were nationalised, and the country teetered on the brink of bankruptcy. Help came to Iceland in November 2008 with a $2.1 billion IMF loan and $3 billion bailout from Scandinavian neighbours. But spiralling inflation, with wage cuts and redundancies, meant that Icelanders' incomes fell by a quarter in real terms, with high household debt, record unemployment and emigration in search of work. Protesters rioted in Reykjavík, the public furious with a government it felt had betrayed them by not down-sizing the bloated banking system. These public protests brought down the right wing government of Geir Haarde (see above left) in January 2009, to be replaced by a left wing administration under Social Democrat Jóhanna Sigurðardóttir (see right). With backing from the Alþing, Sigurðardóttir immediately began discussions on EU membership (despite incompatibility between the Common Fisheries Policy and Iceland's insistence on its 200 mile exclusion zone), with the eventual aim of joining the Euro as a means of stabilising Iceland's economy. Negotiations continued but in 2014 Iceland's application for EU accession was finally withdrawn (see below). EU membership remains a contentious issue among Icelanders, and the country remains only an EFTA member and part of the European Economic Area and of the Schengen Agreement.

Despite the severity of the 2008 financial crisis, since 2009 both recovery and economic growth have been rapid; exports have been cheaper due to devaluation of the króna and with cheaper prices tourism has boomed as never before. The Icelandic government refused to bail out the banks, with priority for taxation spending given to the social welfare system to help those worst affected by the crash. The banks wrote off their debts, with impact falling on private creditors, many of them hedge funds, who are still trying to recover their investments. Iceland's approach to its recovery has won praise from the IMF and from international economists.

Iceland again hit global headlines in 2010 when the ash cloud from the volcanic eruption under the Eyjafjallajökull ice cap shut down European air traffic for a week, causing travel chaos across the continent. The Grímsvötn volcano which erupted in 2011 was less serious, but its ash cloud caused 3 days of air traffic disruption. In 2014 Bárðarbunga's rumblings again highlighted Iceland's volatility and its potential to close airspace. Tourism continues to grow with all the economic benefits but significant environmental impact.

Current Icelandic politics:  the 2013 general election was held against a backdrop of national economic recovery but public resentment against the Social Democrat government's tough austerity measures of spending cuts and higher taxation. The centre-right opposition comprising the Progressive Party and Independence Party successfully campaigned on promises of debt relief and cuts in taxation and opposition to the Iceland's application to join the EU. The result was a backlash against the ruling Social Democrat government and landslide victory for the Progressive and Independence Parties who formed a new coalition government under the new Prime Minister Sigmundur Davíð Gunnlaugsson (see left). In early 2014 the new government suspended all negotiations on accession to the EU, and promised a national referendum on whether Iceland should resume talks on EU membership. As of present the referendum has yet to be held, but an opinion poll in early 2015 showed that 71% of Icelanders oppose EU membership; any attempt therefore to resume talks without the promised referendum would be deeply unpopular. And then in early 2016 leaked documents from the Panama-based law firm Mossack Fonseca showed that Prime Minister Sigmundur Gunnlaugsson owned a secret offshore company with his wife, undeclared when he entered parliament in 2009. Mossack Fonseca data also show that he had an undeclared interest in his country's failed banks, and used the offshore company to conceal the investment of millions of dollars. Recalling the financial scandals of 2008 which brought the county's economy to its knees, the Icelandic public was outraged by stories of continuing corruption in public life. With thousands of Icelanders protesting outside the parliament building in Reykjavik and opposition parties tabling a no confidence motion, Sigmundur Gunnlaugsson was forced to resign and the Progressive Party's leader Sigurður Ingi Jóhannsson became Acting Prime Minister. The General Election for the 63 seat Althing, was brought forward to October 2016 which resulted in neither of the two main blocs, the outgoing coalition of Independence and the Progressive Parties, or the centre-left opposition (Left-Greens, Pirates, Bright Future and Social Democrats), securing an overall majority. Despite negotiations within the 2 main party blocs, no progress was made in agreeing a workable coalition, the main stumbling blocks being a new market-based fishing quota system and the EU referendum. In December 2016, the Icelandic President gave a mandate to form a majority government to the leader of the radical Pirate Party, Birgitta Jónsdóttir, but the Pirates were unable to form a coalition. The President chose not to give a new mandate to form a government, but asked the party leaders to discuss the matter informally. In January 2017, a new coalition government was formed between Independence Party, Reform Party and the Bright Future Party, with Bjarni Benediktsson, leader of the Independence Party, becoming Prime Minister on 11 January 2017 (see right).

History of the Faroe Islands:  the Faroe Islands (Føroyar in Faroese meaning 'Sheep Islands') are a small group of glacier-sculpted basalt islands set at latitude 62ºN in the North Atlantic halfway between Scotland and Iceland, with a population of 48,000. It is a self-governing region within the Kingdom of Denmark, with its own currency the Faroese Króna tied to the Danish Króna. Their history mirrors that of Iceland: with no indigenous population, the Faroes were settled in the 9th~10th centuries by Viking farmers, forcibly converted to Christianity in the 10th century, and ruled by Norway until taken over in the 16th century by the Danish kingdom. Under Danish rule, the Faroese reluctantly were forced to adopt Lutheranism at the 1535 Reformation, and for the next 2 centuries were subject to the impoverishing restrictions of Danish trade monopoly and greed of Danish governors. The trade monopoly was finally lifted in 1856, by which time fishing had become the mainstay of the Faroese economy. The mid 19th century saw the beginnings of Faroese nationalism and demands for greater autonomy which culminated in the Føringafelag movement led by the Self-Rule Party leader Jóhannes Patursson (see left), fighting for the islands' self government by the Faroese parliament, the Lógting, and protection of the Faroese language from assimilation by Danish. Division of feeling on the Faroes between the conservatives who supported continuation of rule by Denmark and the radicals advocating home rule, prevented any change until Denmark was occupied by the Germans in WW2. British troops were sent to the Faroes in April 1940 to protect the North Atlantic shipping lanes, and from 25 April 1940 all Faroese ships flew the islands' flag, the Merkið (meaning the Banner) (see below right), a day still celebrated on the Faroes as National Flag Day.

1990s financial crisis and the issue of full independence:  during the war, the Faroese enjoyed home-rule in all but name, and in 1946 a referendum voted in favour of full independence. The Danish government however refused to recognise the referendum and the king dissolved the Lógting and ordered new elections. The new Lógting agreed to a middle course of greater self-rule within the union with Denmark and the Faroese Home Rule Act came into effect in April 1948. The Faroese parliament now has full powers over home affairs, including taxation, communications and education, with Faroese the official language of politics and national life. Danish must still be taught in schools and Denmark retains control of defence, foreign policy, justice and the currency. Trade is left in the hands of the Faroese, so that when Denmark joined the EU in 1973, the Faroes refused to join mainly to preserve the exclusivity of their fishing limits; all trade with EU countries is governed by specially negotiated treaties drawn up in consultation with the Danish foreign ministry. The Faroese pay no direct taxes to Copenhagen but receive subsidies from Denmark equivalent to 14% of their GDP. The post-war Faroese economy prospered, relying entirely on fishing which was aided by the 200 mile exclusion limit and cushioned by generous government grants. During the 1980s the Faroes enjoyed a high standard of living with unemployment low and spending high; road and tunnel building improved communications and brought the islands' communities together. But in the early 1990s dramatic reduction in fish stocks due to over-fishing with high-tech equipment hit the fishing industry hard: the annual catch fell along with the price of fish, and as a result the whole economy was plunged into crisis. During the same period the government was also engaged in massive overspending resulting in national debt of 9.4 billion Danish kroner. The national bank was supporting a massive debt and as people increasingly defaulted on their loans, the bank collapsed and was forced to ask the Danish government for a huge financial bailout. In return for financial support of almost 2 million kroner, the Danes demanded major reforms: Austerity measures were introduced to reduce public spending with higher taxes and cuts in public employees' pay. Unemployment rose to over 20% and the fishing industry was crippled with half the boats and processing plants going into receivership. Bankruptcy and scandal with the banks brought further requests for Danish bailouts, and finally a compromise reduction in the Faroese debt and interest free loans. Unemployment peaked in January 1994 at 26%, but has since fallen to 10% in 2000. Recovery measures were put in place and have largely resulted in revival of the economy. The fishing industry survived largely intact, fish stocks stabilised and the annual catch increased again. With fishing forming such a significant part of the Faroese economy (fisheries products account for 95% of total exports and half the Faroese GDP), the Faroe Islands operate a 200 mile exclusive offshore fishing zone and remain outside the EU despite Denmark's membership; relations between the EU and Faroes remain contentious over the issue of fishing quotas. The discovery of oil deposits in Faroese waters has led to exploratory drilling, and even though the oil may be difficult to extract, this has brought optimism for the future. The issue of full independence remains a contentious issue with the Faroese public since without Danish subsidies, this would leave them totally dependent on their own resources for continued prosperity.

OUR 2017 TRIP TO ICELAND:  so that's the background story of Iceland so far. When we first went there in 1972, Iceland was a largely undiscovered country still free of the ravages of tourism. In the intervening 45 years, the mass tourism industry now exploits the country to an ever-increasing extent. While this has benefitted the country's fragile economy and brought infrastructure improvement such as improved road system and increased number of campsites, the downside is to threaten the natural beauty of key sites with the impact of overwhelming numbers of visitors. We shall certainly notice the difference. As always, we travel purposefully, with the intention of learning more about Icelandic society and Icelanders' views on current issues: how do they feel for example about recent political corruption scandals and changes of government, and about Iceland resuming talks on accession to the EU. After all, they have been promised a referendum on EU membership by their government, just as the UK voted on this issue last year. It is going to be one of our more challenging trips, but we are looking forward to the opportunity for learning for ourselves more about our host-country, for discussing and understanding more about life there, and of course for seeing once again Iceland's astonishing geological wonders and its magnificent birdlife. We set off shortly and as usual shall be publishing regular reports and pictorial record of our travels. We hope you will enjoy sharing our experiences of Iceland through our on-line travelogues.

Sheila and Paul

Published:  11 April 2017

		Top of News Page
		Iceland 1972 Photo Gallery
		Return to Iceland Index Page

Music this week:  Lofsöngur - Icelandic National Anthem Ó Guð vors lands  (O God of our Land)

Sweden 2016 Finland 2115 Norway 2014 Sweden 2013 Finland 2012 Baltic States 2011 Poland 2010 Czech Republic 2009 Sardinia~Corsica 2009 Slovakia 2008 Croatia 2008 Denmark 2007 Sicily 2007 Alsace 2006 Greece 2006 Hungary 2005 Pyrenees 2005 Slovenia 2004 Greece 2004 Home Page Site Plan Who we are Publications