According to the Landnámabók, an ancient manuscript, the settlement of Iceland began in 874 AD, when the Norwegian chieftain Ingólfr Arnarson became the island's first permanent settler. In following centuries, Norwegians and to a lesser extent other Scandinavians, migrated to Iceland, bringing with them thralls (i.e., slaves or serfs) of Gaelic origin.
The island was governed as an independent commonwealth under the native parliament, the Althing, one of the world's oldest functioning legislative assemblies. After a period of civil strife, Iceland acceded to Norwegian rule in the 13th century. In 1397, Iceland followed Norway's integration into the Kalmar Union along with the kingdoms of Denmark and Sweden, coming under de facto Danish rule upon its dissolution in 1523.
The Danish kingdom introduced Lutheranism by force in 1550, and the Treaty of Kiel formally ceded Iceland to Denmark in 1814.
Influenced by ideals of nationalism after the French Revolution, Iceland's struggle for independence took shape, culminating with the Danish–Icelandic Act of Union in 1918, and the establishment of the Kingdom of Iceland, sharing through a personal union the incumbent monarch of Denmark. During the occupation of Denmark in World War II, Iceland voted overwhelmingly to become a republic in 1944, ending its remaining formal ties to Denmark.
Although the Althing was suspended from 1799 to 1845, Iceland nevertheless has a claim to sustaining one of the world's longest-running parliaments. Until the 20th century, Iceland relied largely on subsistence fishing and agriculture. Industrialisation of the fisheries and Marshall Plan aid after World War II brought prosperity, and Iceland became one of the world's wealthiest and most developed nations.
In 1950, Iceland joined the Council of Europe. In 1994 it became a part of the European Economic Area, further diversifying its economy into sectors such as finance, biotechnology, and manufacturing.
Iceland has a market economy with relatively low taxes, compared to other OECD countries, as well as the highest trade union membership in the world. It maintains a Nordic social welfare system that provides universal health care and tertiary education. Iceland ranks highly in international comparisons of national performance, such as quality of life, education, protection of civil liberties, government transparency, and economic freedom.
It has the smallest population of any NATO member and is the only one with no standing army, possessing only a lightly armed coast guard.
Etymology
The Landnámabók names Naddodd (Old Norse: Naddoðr) as the first Norseman to reach Iceland in the ninth century, having gotten lost while sailing from Norway to the Faroe Islands. He gave the island its first name of Snæland (English: Snowland). The second explorer to arrive was the Swedish Garðar Svavarsson, who circumnavigated the island and named it Garðarshólmur (English: Garðar's Isle) after himself.
The island's present name originated from Flóki Vilgerðarson, the first Norseman to intentionally travel to Iceland. According to the Sagas of Icelanders, Flóki coined the name after he climbed a mountain, despondent after a harsh winter in present-day Vatnsfjörður, and saw an ice cap. The notion that Iceland's settlers chose that name to discourage competing settlements is most likely a myth.
History
874–1262: settlement and Commonwealth
According to both Landnámabók and Íslendingabók, monks known as the Papar lived in Iceland before Scandinavian settlers arrived, possibly members of a Hiberno-Scottish mission. An archaeological excavation has revealed the ruins of a cabin in Hafnir on the Reykjanes peninsula.
Carbon dating indicates that it was abandoned sometime between 770 and 880. In 2016, archaeologists uncovered a longhouse in Stöðvarfjörður that may date to as early as 800.
Swedish Viking explorer Garðar Svavarsson was the first to circumnavigate Iceland in 870, and established that it was an island. He stayed during the winter and built a house in Húsavík. Garðar departed the following summer, but one of his men, Náttfari, decided to stay behind with two slaves. Náttfari settled in what is now known as Náttfaravík, and he and his slaves became the first documented permanent residents of Iceland.
The Norwegian-Norse chieftain Ingólfr Arnarson built his homestead in present-day Reykjavík in 874. Ingólfr was followed by many other emigrant settlers, largely Scandinavians and their thralls, many of whom were Irish or Scottish. By 930, most arable land on the island had been claimed; the Althing, a legislative and judicial assembly, was initiated to regulate the Icelandic Commonwealth.
The lack of arable land also served as an impetus to the settlement of Greenland starting in 986. The period of these early settlements coincided with the Medieval Warm Period, when temperatures were similar to those of the early 20th century. At that time, about 25% of Iceland was covered with forest, compared to 1% in the present day.
Christianity was adopted by consensus around 999–1000, although Norse paganism persisted among segments of the population for some years afterward.
Iceland as a possession
Middle Ages
The Icelandic Commonwealth, established in the 10th century, faced internal strife during the Age of the Sturlungs (c. 1220–1264). This period was marked by violent conflicts among chieftains, notably the Sturlung family, leading to the weakening of the Commonwealth's political structure. The culmination of the struggles was the signing of the Old Covenant (Gamli sáttmáli) in 1262–1264, bringing Iceland under Norwegian rule.
Environmental challenges further impacted medieval Icelandic society. Upon settlement, approximately 25–40% of Iceland was forested. However, extensive deforestation occurred as forests were cleared for timber, firewood, and to create grazing land for livestock. This led to significant soil erosion and a decline in arable land, exacerbating the difficulties of sustaining agriculture in Iceland's harsh climate.
Agriculture during this period was predominantly pastoral, focusing on livestock such as sheep, cattle, and horses. While early settlers cultivated barley, the cooling climate from the 12th century onwards made grain cultivation increasingly difficult. The Little Ice Age began around 1300, bringing colder and more unpredictable weather, further shortening growing seasons and making farming more challenging.
The Black Death reached Iceland in 1402–1404 and again in 1494–1495, with devastating effects. The first outbreak is estimated to have killed 50–60% of the population, while the second resulted in a 30–50% mortality rate. These pandemics significantly reduced the population, leading to social and economic disruptions.
In 1380, after the death of Haakon VI, his son Olaf II of Denmark succeeded to the Norwegian throne, uniting the crowns of Denmark and Norway under one monarch. Because Iceland was part of the Norwegian realm, it thereby came under the Danish-Norwegian crown. In 1397, the Kalmar Union brought Denmark, Norway, and Sweden under a single monarch.
Reformation and the Early Modern period
Around the middle of the 16th century, as part of the Protestant Reformation, King Christian III of Denmark began to impose Lutheranism on all his subjects. Jón Arason, the last Icelandic Catholic bishop, and two of his sons were beheaded in 1550. Iceland then became officially Lutheran, and Lutheranism has since remained the dominant religion.
In the 17th and 18th centuries, Denmark imposed harsh trade restrictions on Iceland. Natural disasters, including volcanic eruptions and disease, contributed to a decreasing population. In the summer of 1627, Barbary Pirates committed the events known locally as the Turkish Abductions, in which hundreds of residents were taken into slavery in North Africa and dozens killed; this was the only invasion in Icelandic history to have caused casualties.
The 1707–08 Iceland smallpox epidemic is estimated to have killed a quarter to a third of the population. In 1783 the Laki volcano erupted, with devastating effects. In the years following the eruption, known as the Mist Hardships (Icelandic: Móðuharðindin), over half of all livestock in the country died. Around a quarter of the population starved to death in the ensuing famine.
1814–1918: independence movement
After the Napoleonic Wars in 1814, Denmark-Norway broke up into two separate kingdoms under the Treaty of Kiel, but Iceland remained a Danish dependency. Throughout the 19th century, the country's climate continued to grow colder, resulting in mass emigration to the New World, particularly to the region of Gimli, Manitoba in Canada, which was sometimes referred to as New Iceland. About 15,000 people emigrated out of a total population of 70,000.
A national consciousness arose in the first half of the 19th century, inspired by romantic and nationalist ideas from mainland Europe. An Icelandic independence movement took shape in the 1850s under the leadership of Jón Sigurðsson, based on the burgeoning Icelandic nationalism inspired by the Fjölnismenn and other Danish-educated Icelandic intellectuals.
In 1874, poet and clergyman Matthías Jochumsson wrote the lyrics of "Lofsöngur", which became the Icelandic national anthem. Composer Sveinbjörn Sveinbjörnsson wrote the music.
In 1874, Denmark granted Iceland a constitution and limited home rule. That was expanded in 1904, and Hannes Hafstein served as the first Minister for Iceland in the Danish cabinet.
1918–1944: independence and the Kingdom of Iceland
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 and independent state in a personal union with Denmark. The Government of Iceland established an embassy in Copenhagen and requested that Denmark carry out on its behalf certain defence and foreign affairs matters, subject to consultation with the Althing.
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. Iceland's legal position became comparable to those of countries belonging to the Commonwealth of Nations, such as Canada, whose sovereign is King Charles III.
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 would take control of its own defence and foreign affairs. A month later, British armed forces conducted Operation Fork, the invasion and occupation of the country, violating Icelandic neutrality.
In 1941, the Government of Iceland, friendly to Britain, invited the United States, then neutral, to take over its defence so that Britain could use its troops elsewhere.
1944–present: Republic of Iceland
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 US Defense Force left Iceland. The nation 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.
Iceland prospered during the Second World War. The immediate post-war period was followed by substantial economic growth, driven by the industrialisation of the fishing industry and the US Marshall Plan program, through which Icelanders received the most aid per capita of any European country (at US$209, with war-ravaged Netherlands a distant second at US$109).
Vigdís Finnbogadóttir assumed Iceland's presidency on 1 August 1980, making her the first elected female head of state in the world.
The 1970s were marked by the Cod Wars, which were several disputes with the United Kingdom over Iceland's extension of its fishing limits to 200 nmi (370 km) 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 towards nuclear disarmament.
A few years later, Iceland became the first country to recognise 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 towards humanitarian and peacekeeping causes. To that end, Iceland provided aid and expertise to various NATO-led interventions in Bosnia, Kosovo, and Iraq.
Iceland joined the European Economic Area in 1994, after which the economy was greatly diversified and liberalised. International economic relations increased further after 2001 when Iceland's newly deregulated banks began to raise great amounts of external debt, contributing to a 32 per cent increase in Iceland's gross national income between 2002 and 2007.
Economic boom and crisis
In 2003–2007, after the privatisation of the banking sector under the government of Davíð Oddsson, Iceland moved towards 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.
Since 2012
Iceland's economy stabilised under the government of Jóhanna Sigurðardóttir, growing by 1.6% in 2012. The centre-right Independence Party was returned to power in coalition with the Progressive Party in the 2013 election. In the following years, Iceland benefited from a surge in tourism as the country became a popular holiday destination.
In 2016, Prime Minister Sigmundur Davíð Gunnlaugsson resigned after being implicated in the Panama Papers scandal. Early elections in 2016 resulted in a right-wing coalition government of the Independence Party, Viðreisn and Bright Future. This government fell when Bright Future quit the coalition due to a scandal involving a letter of support for a convicted child sex offender from the father of Prime Minister Bjarni Benediktsson of the Indepedence Party.
Snap elections in October 2017 brought to power a new coalition consisting of the Independence Party, the Progressive Party, and the Left-Green Movement, headed by Katrín Jakobsdóttir.
After the 2021 parliamentary election, the new government was, just like the previous government, a tri-party coalition of the Independence Party, the Progressive Party, and the Left-Green Movement, headed by Prime Minister Katrín Jakobsdóttir. In April 2024, Bjarni Benediktsson succeeded Katrín as prime minister. In a snap election in November 2024, the centre-left Social Democratic Alliance became the biggest party, and Social Democrat Kristrún Frostadóttir became the next Prime Minister of Iceland.
Geography
Iceland is at the juncture of the Arctic Ocean and 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 68°N, and longitudes 25 and 13°W.
Iceland is closer to continental Europe than to mainland North America, although it is closest to Greenland, an island of North America. Iceland is generally included in Europe for geographical, historical, political, cultural, linguistic, and practical reasons. Geologically, the island includes parts of both continental plates.
The closest bodies of land in Europe are the Faroe Islands (420 km; 225 nmi); Jan Mayen Island (570 km; 310 nmi); Shetland and the Outer Hebrides, both about 740 km (400 nmi); and the Scottish mainland and Orkney, both about 750 km (405 nmi). The nearest part of Continental Europe is mainland Norway, about 970 km (525 nmi) away, while mainland North America is 2,070 km (1,120 nmi) away, at the northern tip of Labrador.
