History of Iceland
This article is about the history of the areas comprising modern-day Iceland.
Early history 
In geological terms, Iceland is a young island. It started to form about 20 million years ago from a series of volcanic eruptions on the Mid-Atlantic Ridge. The Iceland hotspot is likely partly responsible for the island's creation and continued existence.
Iceland remained, for a long time, one of the world's last larger islands uninhabited by humans (the others being New Zealand and Madagascar). It has been suggested that the land called Thule by the Greek merchant Pytheas (4th century BC) was actually Iceland, although it seems highly unlikely considering Pytheas' description of it as an agricultural country with plenty of milk, honey, and fruit (possibly the Faroe or Shetland islands). The exact date that humans first reached the island is uncertain. Ancient Roman coins dating to the 3rd century 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 monks and Papar from a Hiberno-Scottish mission may have settled in Iceland before the arrival of the Norse. The 12th-century scholar Ari Þorgilsson wrote in his book, Íslendingabók, that small bells, corresponding to those used by Irish monks, were found by the settlers. No such artifacts have been discovered by archaeologists, however. Some Icelanders claimed descent from Kjarvalr Írakonungr (a king in south-east Ireland) at the time of the Landnámabók's creation.
Settlement (874-930) 
Irish monks 
Landnámabók mentions the presence of Irish monks prior to Norse settlement, and states that the monks left behind Irish books, bells and crosiers, among other things. According to the same account, the Irish monks abandoned the country when the Norse arrived, or had left prior to their arrival.
Another source mentioning the Papar is Íslendingabók, dating from between 1122 and 1133. According to this account, the previous inhabitants, a few Irish monks, known as the Papar, left the island since they did not want to live with pagan Norsemen. One theory suggests that those monks were members of a Hiberno-Scottish mission, i.e. Irish and Scottish monks who spread Christianity during the Middle Ages. They may also have been hermits.
Recent archaeological excavations have revealed the ruins of a cabin in Hafnir on the Reykjanes peninsula (close to Keflavík Airport). Carbon dating reveals that the cabin was abandoned somewhere between 770 and 880, suggesting that Iceland was populated well before 874. This archaeological find may also indicate that the monks left Iceland before the Norse arrived.
Norse Discovery 
According to Landnámabók, Iceland was first discovered by Naddoddr, one of the first settlers in the Faroe Islands, who was sailing from Norway to the Faroe Islands, but lost his way and drifted to the east coast of Iceland. Naddoddr named the country Snæland (Snowland). Swedish sailor Garðar Svavarsson also accidentally drifted to the coast of Iceland. He discovered that the country was an island and named it Garðarshólmi (literally Garðar's Islet) and stayed for the winter at Húsavík. The first Scandinavian who deliberately sailed to Garðarshólmi (Iceland) was Flóki Vilgerðarson, also known as Hrafna-Flóki (Raven-Flóki). Flóki settled for one winter at Barðaströnd. It was a very cold winter, and when he spotted some drift ice in the fjords he gave the island its current name, Ísland (Iceland).
First settler 
The first permanent settler in Iceland is usually considered to have been a Norwegian chieftain named Ingólfur Arnarson. According to Landnáma, 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 Reykjavík (Cove of Smoke) 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 recognized, however, that Ingólfur Arnarson may not have been the first one to settle permanently in Iceland — that may have been Náttfari, one of Garðar Svavarsson's men who stayed behind when Garðar returned to Scandinavia.
Much of the above information comes from Landnámabók (Book of Settlement), written some three centuries after the settlement. Archeological findings in Reykjavík are consistent with the date given there: there was a settlement in Reykjavík around 870.
Ingólfur 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. Some of the Irish and Scots were slaves and servants of the Norse chiefs according to the Icelandic sagas and Landnámabók and other documents. Some settlers coming from the British Isles were "Hiberno-Norse," with cultural and family connections both to the coastal and island areas of Ireland and/or Scotland and to Norway. The traditional explanation for the exodus from Norway is that people were fleeing the harsh rule of the Norwegian king Haraldur Hárfagri (Harald the Fair-haired), whom medieval literary sources credit with the unification of some parts of modern Norway during this 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 Landnámabók, although the book was compiled in the early 12th century when at least 200 years had passed from the age of settlement. Ari Þorgilsson's Íslendingabók 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 arable land had been claimed by various settlers.
Commonwealth (930-1262) 
In 930, the ruling chiefs established an assembly called the Alþingi (Althing). The parliament convened each summer at Þingvellir, where representative chieftains (Goðorðsmenn or Goðar) amended laws, settled disputes and appointed juries to judge lawsuits. Laws were not written down, but were instead memorized by an elected Lawspeaker (lögsögumaður). The Alþingi 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. This gave rise to blood-feuds, which provided the writers of the Icelanders' 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 southwest Greenland and eastern Canada, and sagas such as Eiríks saga rauða and Grænlendinga saga speak of the settlers' exploits.
The settlers of Iceland were dominantly pagans and worshipped the Norse gods, among them Odin, Thor, Freyr and Freyja. However, by the 10th century political pressure from Europe to convert to Christianity mounted. As the end of the 1st millennium grew near, many prominent Icelanders had accepted the new faith. In the year 1000, as a civil war between the religious groups seemed likely, the Alþing appointed one of the chieftains, Þorgeirr Ljósvetningagoði, to decide the issue of religion by arbitration. He decided that the country should convert to Christianity as a whole, but that pagans would be allowed to worship privately.
Civil War and the end of the Commonwealth 
During the 11th and 12th centuries, the centralization 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 around 1200 to 1262 is generally known as Sturlungaöld, the "Age of the Sturlungs." This refers to Sturla Þórðarson and his sons Þórður, Sighvatur, and Snorri, who were one of two main clans fighting for power over Iceland, causing havoc in a land inhabited almost entirely by farmers who could ill-afford to travel far from their farms, across the island to fight for their leaders. In 1220 Snorri Sturluson became a vassal of Haakon IV of Norway; 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 Old Covenant (Gamli sáttmáli) establishing a union with the Norwegian monarchy.
Iceland under Norwegian and Danish kings (1262-1944) 
Norwegian rule 
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 Skálholt and Hólar acquired land at the expense of the old chieftains.
Around the time Iceland became a vassal state of Norway, a climate shift occurred—a phenomenon now called the Little Ice Age. Areas near the Arctic Circle such as Iceland and Greenland began to have shorter growing seasons and colder winters. Since Iceland had marginal farmland in good times, the climate change resulted in hardship for the population. It became more difficult to raise barley, the primary cereal crop, and livestock required additional fodder to survive longer and colder winters. Icelanders began to trade for grain from continental Europe — an expensive proposition. Fortunately, Church fast days increased demand for dried codfish, which was easily caught and prepared for export, and the cod trade became an important part of the economy.
Danish rule 
Iceland remained under Norwegian kingship until 1380, when the death of Olav IV extinguished the Norwegian male royal line. Norway (and thus Iceland) then became part of the Kalmar Union, along with Sweden and Denmark, with Denmark as the dominant power. 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.
With the introduction of absolute monarchy in Denmark–Norway in 1660 under Frederick III, the Icelanders relinquished their autonomy to the crown, including the right to initiate and consent to legislation. Denmark, however, did not provide much protection to Iceland, which was raided in 1627 by an Ottoman pirate kill fleet that abducted almost 300 Icelanders into slavery, in the episode known as the Turkish Abductions.
Reformation and Danish Trade Monopoly 
By the middle of the 16th century, Christian III of Denmark began to impose Lutheranism on his subjects. Jón Arason and Ögmundur Pálsson, the Catholic bishops of Skálholt and Hólar respectively, opposed Christian's efforts at promoting the Protestant Reformation in Iceland. Ögmundur was deported by Danish officials in 1541, but Jón Arason put up a fight. Opposition to the reformation ended in 1550 when Jón Arason was captured after being defeated in the Battle of Sauðafell by loyalist forces under Daði Guðmundsson. Jón Arason and his two sons were subsequently beheaded in Skálholt. Following this, the Icelanders became Lutherans and remain largely so to this day.
In 1602 Iceland was forbidden to trade with countries other than Denmark, by order of the Danish government, which at this time pursued mercantilist policies. The Danish trade monopoly would remain in effect until 1786.
The Eruption of Laki 
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 km³) of lava. Floods, ash, and fumes wiped out 9,000 people and 80 percent of the livestock. The ensuing starvation killed a quarter of Iceland's population. This period is known as the Mist Hardships (Icelandic: Móðuharðindin).
Independence movement 
Throughout the 19th century, the country's climate continued to grow worse, resulting in mass emigration to the New World, particularly Manitoba in Canada. However, a new national consciousness was revived in Iceland, inspired by romantic nationalist ideas from continental Europe. This revival was spearheaded by the Fjölnismenn, a group of Danish-educated Icelandic intellectuals. An independence movement developed under the leadership of a lawyer named Jón Sigurðsson. In 1843 a new Althing was founded as a consultative assembly. It claimed continuity with the Althing of the Icelandic Commonwealth, which had remained for centuries as a judicial body and been abolished in 1800.
Home rule and sovereignty 
In 1874, a thousand years after the first acknowledged settlement, Denmark granted Iceland a constitution and home rule, which again was expanded in 1904. The constitution was revised in 1903, and a minister for Icelandic affairs, residing in Reykjavík, was made responsible to the Althing, the first of whom was Hannes Hafstein. The Act of Union, a December 1, 1918, agreement with Denmark, recognized Iceland as a fully sovereign state — the Kingdom of Iceland - joined with Denmark in a personal union with the Danish king. Iceland established its own flag, declared its neutrality and asked Denmark to represent its foreign affairs and defense interests. The Act would be up for revision in 1940 and could be revoked three years later if agreement was not reached.
These principles of partial sovereignty were exercised in the Swedish-Icelandic Declaration regarding mutual protection of trade marks in Sweden and Iceland, exchanged at Copenhagen on March 23, 1921. Even though the declaration was signed in Copenhagen and with the approval of the Danish government, it was drawn in Swedish and Icelandic only, without the Danish language being represented.
World War II 
The occupation of Denmark by Nazi Germany began on April 9, 1940, severing communications between Iceland and Denmark. As a result, on April 10, the Parliament of Iceland, Alþingi, elected to take control of foreign affairs, electing a provisional governor, Sveinn Björnsson, 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, British military forces began an invasion of Iceland when they sailed into Reykjavík harbour in Operation Fork.
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 Jónasson read a radio announcement asking Icelanders to treat the British troops with the politeness as if they were 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 Reykjavík 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 Alþingi 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.)
Republic of Iceland 
Founding of the Republic 
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 an independent republic on June 17, 1944, with Sveinn Björnsson as its first President. Denmark was still occupied by Germany. Despite this, the Danish king, Christian X, sent a message of congratulations to the Icelandic people.
Iceland had prospered during the course of the war, amassing considerable currency reserves in foreign banks. In addition to this, the country received the most Marshall Aid per capita of any European country in the immediate postwar years (at USD 209, with the Netherlands a distant second at USD 109).
The new republican government, led by an unlikely three-party majority cabinet made up of conservatives (the Independence Party, Sjálfstæðisflokkurinn), social democrats (the Social Democratic Party, Alþýðuflokkurinn), and socialists (People's Unity Party – Socialist Party, Sósíalistaflokkurinn), decided to put the funds into a general renovation of the fishing fleet, the building of fish processing facilities, the construction of a cement and fertilizer factory, and a general modernization 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 policy was strictly Keynesian, and their aim was to create the necessary industrial infrastructure for a prosperous developed country. It was considered essential to keep unemployment down to an absolute minimum and to protect the export fishing industry through currency manipulation 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 and the Cold War 
In October 1946, the Icelandic and United States' governments agreed to terminate U.S. responsibility for the defense of Iceland, but the United States retained certain rights at Keflavík, such as the right to re-establish a military presence there, should war threaten.
Iceland became a charter member of NATO on March 30, 1949, with the reservation that it would never take part in offensive action against another nation. The membership came amid an anti-NATO riot in Iceland. After the outbreak of the Korean War in 1950, and pursuant to the request of NATO military authorities, the United States and Alþingi 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 U.S. military presence in Iceland, which remained until 2006. Although U.S. forces no longer maintain a military presence in Iceland, the US still assumes responsibility over the country's defense through NATO. Iceland has retained strong ties to the other Nordic countries. As a consequence Norway, Denmark, Germany and other European nations have increased their defense and rescue cooperation with Iceland since the withdrawal of U.S. forces.
Cod Wars 
The Cod Wars were a series of conflicts between Iceland and the United Kingdom from the late 1950s to the mid-1970s. 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 (93 km) to 200 miles (370 km). The UK did not recognize Iceland's authority in the matter and continued to fish inside the disputed area, making this the third time that Iceland and the UK 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, the UK 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 and deaths to the crews.
Events took a more serious turn when Iceland threatened closure of the U.S.-manned NATO base at Keflavík, 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 and economic reform 
In 1991, the Independence Party, led by Davíð Oddsson, formed a coalition government with the Social Democrats. This government set in motion market liberalisation policies, privatising a number of state-owned companies. Iceland then became a member of the European Economic Area in 1994. Economic stability increased and previously chronic inflation was drastically reduced.
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 telecom Síminn. 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 remained in power through elections in 1999 and 2003. In 2004, Davíð Oddsson stepped down as Prime Minister after 13 years in office. Halldór Ásgrímsson, leader of the Progressive Party, took over as Prime Minister from 2004 to 2006, followed by Geir H. Haarde, Davíð Oddsson’s successor as leader of the Independence Party.
After a temporary recession in the early 1990s, economic growth was considerable, about 4% per year on average from 1994. The governments of the 1990s and 2000s (decade) adhered to a staunch but domestically controversial pro-U.S. 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.
In March 2006, the United States announced that it intended to withdraw the greater part of the Icelandic Defence Force. On 12 August 2006, the last four F-15s left Icelandic airspace. The United States closed the Keflavík Air Base in September 2006.
Financial crisis 
In October 2008, the Icelandic banking system collapsed, prompting Iceland to seek large loans from the International Monetary Fund and friendly countries. Widespread protests in late 2008 and early 2009 resulted in the resignation of the government of Geir Haarde, which was replaced on 1 February 2009 by a coalition government led by the Social Democratic Alliance and the Left-Green Movement. Social Democrat minister Jóhanna Sigurðardóttir was appointed Prime Minister, becoming the world's first openly homosexual head of government of the modern era. Elections took place in April 2009 and a continuing coalition government consisting of the Social Democrats and the Left-Green Movement was established in early May 2009.
The crisis resulted in the greatest migration from Iceland since 1887, with a net emigration of 5,000 people in 2009. Iceland's economy has since stabilized under the government of Jóhanna Sigurðardóttir, and is expected to grow by 2.8% in 2012.
See also 
- Military history of Iceland
- Politics of Iceland
- President of Iceland
- Prime Minister of Iceland
- Timeline of Icelandic history
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