Iceland

**Iceland** is an island country between the North Atlantic Ocean and Arctic Ocean. Iceland is isolated, with no neighbouring countries. The interior consists of a plateau characterised by sand and lava 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.

## History

### Twentieth and Early Twenty-First Century

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 Denmark. The Government of Iceland established an embassy in Copenhagen and requested that Denmark handle Icelandic foreign policy. Danish embassies around the world displayed 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 replaced the King with a regent and declared that the Icelandic government should assume the control of foreign affairs and other matters previously handled by Denmark. A month later, British armed forces invaded and occupied the country, violating Icelandic neutrality. In 1941, the occupation was taken over by the United States so that Britain could use its troops elsewhere, an arrangement reluctantly agreed to by the Icelandic authorities.

On 31 December 1943, the Danish–Icelandic Act of Union expired after 25 years. Beginning on 20 May 1944, Icelanders voted in a four-day plebiscite on whether to terminate the personal union with Denmark, abolish the monarchy, and establish a republic. The vote was 97% to end the union, and 95% in favour of the new republican constitution Iceland formally became a republic on 17 June 1944, with Sveinn Björnsson as its first president. In 1946, the Allied occupation force left Iceland. 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 1970s were marked by the Cod Wars — several disputes with the United Kingdom over Iceland's extension of its fishing limits to 200 miles offshore. Iceland hosted a summit in Reykjavík in 1986 between United States President Ronald Reagan and Soviet Premier Mikhail Gorbachev, during which they took significant steps toward nuclear disarmament. A few years later, Iceland became the first country to recognize the independence of Estonia, Latvia, and Lithuania as they broke away from the USSR. Throughout the 1990s, the country expanded its international role and developed a foreign policy oriented toward humanitarian and peacekeeping causes.

In the years 2003–2007, following the privatization of the banking sector under the government of Davíð Oddsson, Iceland moved toward having an economy based on international investment banking and financial services. It was quickly becoming one of the most prosperous countries in the world but was hit hard by a major financial crisis. The crisis resulted in the greatest migration from Iceland since 1887, with a net emigration of 5,000 people in 2009. Iceland's economy stabilised under the government of Jóhanna Sigurðardóttir, and grew by 1.6% in 2012. Many Icelanders, however, have remained unhappy with the state of the economy and government austerity policies

## Government and Politics

The president of Iceland is a largely ceremonial head of state and serves as a diplomat, but can veto laws voted by the parliament and put them to a national referendum. The head of government is the prime minister 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.

### Administrative Divisions

Iceland is divided into regions, constituencies and municipalities. There are eight regions which are primarily used for statistical purposes. 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:

* Reykjavík North and Reykjavík South (city regions)
* Southwest (four non-contiguous suburban areas around Reykjavík)
* Northwest and Northeast (northern half of Iceland, split)
* South (southern half of Iceland, excluding Reykjavík and suburbs)

There are 74 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

### Foreign Relations

Iceland, which is a member of the UN, NATO, EU and OECD, maintains diplomatic and commercial relations with practically all nations, but its ties with the Nordic countries, Germany, the United States, Canada and the other NATO nations are particularly close. Historically, due to cultural, economic and linguistic similarities, Iceland is a Nordic country, and it participates in intergovernmental cooperation through the Nordic Council. Iceland joined the European Economic Area in 1994, and later joined the European Union in 2020.