Iceland
Republic of IcelandLydveldid Island
constitutional republic
Iceland as the 2014 edition of the CIA World Factbook published it: 159 fields, one of 36 editions from 1990 to 2025.
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Introduction
1 fieldBackground
Settled by Norwegian and Celtic (Scottish and Irish) immigrants during the late 9th and 10th centuries A.D., Iceland boasts the world's oldest functioning legislative assembly, the Althing, established in 930. Independent for over 300 years, Iceland was subsequently ruled by Norway and Denmark. Fallout from the Askja volcano of 1875 devastated the Icelandic economy and caused widespread famine. Over the next quarter century, 20% of the island's population emigrated, mostly to Canada and the US. Denmark granted limited home rule in 1874 and complete independence in 1944.
The second half of the 20th century saw substantial economic growth driven primarily by the fishing industry. The economy diversified greatly after the country joined the European Economic Area in 1994, but Iceland was especially hard hit by the global financial crisis in the years following 2008. Literacy, longevity, and social cohesion are first rate by world standards.
Geography
Northern Europe, island between the Greenland Sea and the North Atlantic Ocean, northwest of the United Kingdom
20 fieldsLand useshare of 103,000 sq km
Location
Northern Europe, island between the Greenland Sea and the North Atlantic Ocean, northwest of the United Kingdom
Terrain
mostly plateau interspersed with mountain peaks, icefields; coast deeply indented by bays and fiords
Freshwater withdrawal (domestic/industrial/agricultural)
- total:
- 0.17 cu km/yr (49%/8%/42%)
- per capita:
- 539.2 cu m/yr (2005)
Natural hazards
earthquakes and volcanic activity
- volcanism:
- Iceland, situated on top of a hotspot, experiences severe volcanic activity;
- Eyjafjallajokull (elev. 1,666 m) erupted in 2010, sending ash high into the atmosphere and seriously disrupting European air traffic;
- scientists continue to monitor nearby Katla (elev. 1,512 m), which has a high probability of eruption in the very near future, potentially disrupting air traffic;
- Grimsvoetn and Hekla are Iceland's most active volcanoes;
- other historically active volcanoes include
Environment - international agreements
- party to:
- Air Pollution, Air Pollution-Persistent Organic Pollutants, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Kyoto Protocol, Law of the Sea, Marine Dumping, Ozone Layer Protection, Ship Pollution, Transboundary Air Pollution, Wetlands, Whaling
- signed, but not ratified:
- Environmental Modification, Marine Life Conservation
Geography - note
- strategic location between Greenland and Europe;
- westernmost European country;
- Reykjavik is the northernmost national capital in the world;
- more land covered by glaciers than in all of continental Europe
People and Society
33 fieldsAge structuremale left, female right · (2014 est.)
Per 1,000 population(2014 est.)
Male · female
Religions(2013 est.)
Ethnic groups
homogeneous mixture of descendants of Norse and Celts 94%, population of foreign origin 6%
Sex ratio
- at birth:
- 1.04 male(s)/female
- 0-14 years:
- 1.03 male(s)/female
- 15-24 years:
- 1.02 male(s)/female
- 25-54 years:
- 1.02 male(s)/female
- 55-64 years:
- 1 male(s)/female
- 65 years and over:
- 0.85 male(s)/female
- total population:
- 1 male(s)/female (2014 est.)
HIV/AIDS - people living with HIV/AIDS
fewer than 1,000 (2009 est.) country comparison to the world: 147
Government
Constitutional republic; President Olafur Ragnar GRIMSSON (since 1 August 1996); Prime Minister Sigmundur David GUNNLAUGSSON (since 23 May 2013)
20 fieldsPresidential electionpercent of vote
Legislature, 63 seats, elected 27 April 2013one dot, one seat
Percent of vote
Country name
- conventional long form:
- Republic of Iceland
- conventional short form:
- Iceland
- local long form:
- Lydveldid Island
- local short form:
- Island
Capital
- name:
- Reykjavik
- geographic coordinates:
- 64 09 N, 21 57 W
- time difference:
- UTC 0 (5 hours ahead of Washington, DC, during Standard Time)
Administrative divisions
8 regions; Austurland, Hofudhborgarsvaedhi, Nordhurland Eystra, Nordhurland Vestra, Sudhurland, Sudhurnes, Vestfirdhir, Vesturland
Independence
- 1 December 1918 (became a sovereign state under the Danish Crown);
- 17 June 1944 (from Denmark; birthday of Jon SIGURDSSON leader of Iceland's 19th Century independence movement)
Constitution
- several previous;
- latest ratified 16 June 1944, effective 17 June 1944 (at independence);
- amended many times, last in 2013;
- note - a new constitution drafted in 2012 in the aftermath of the country's banking collapse was voted down in April 2013 by the recently elected parliament, though several amendments were passed (2013)
International law organization participation
has not submitted an ICJ jurisdiction declaration; accepts ICCt jurisdiction
Executive branch
- chief of state:
- President Olafur Ragnar GRIMSSON (since 1 August 1996)
- head of government:
- Prime Minister Sigmundur David GUNNLAUGSSON (since 23 May 2013)
- cabinet:
- Cabinet appointed by the prime minister; (For more information visit theWorld Leaders website)
- elections:
- president is elected by popular vote for a four-year term (no term limits);
- election last held on 30 June 2012 (next to be held in June 2016);
- note - following legislative elections, the leader of the majority party or the leader of the majority coalition is usually the prime minister
- election results:
- Olafur Ragnar GRIMSSON elected president; percent of vote - Olafur Ragnar GRIMSSON 52.8%, Thora ARNORSDOTTIR 33.2%, Ari Trausti GUDMUNDSSON 8.6%, other 5.4%
Legislative branch
unicameral Althingi (parliament) (63 seats; members elected by popular vote to serve four-year terms)
- elections:
- last held on 27 April 2013 (next to be held in 2017)
- election results:
- percent of vote by party - SDA 30.16%, IP 25.4%, LGM 17.46%, PP 14.29%, Bright Future 3.18%, Dawn 3.18%, Rainbow 3.18%, Pirate Party 1.59%, Solidarity 1.59%;
- seats by party - SDA 19, IP 16, LGM 11, PP 9, Bright Future 2, Dawn 2, Rainbow 2, Pirate Party 1, Solidarity 1
Judicial branch
- highest court(s):
- Supreme Court or Haestirettur (consists of 9 judges)
- judge selection and term of office:
- judges proposed by Ministry of Interior selection committee and appointed by the president; judges appointed for an indefinite period
- subordinate courts:
- 8 district courts; Labor Court
Political parties and leaders
- Bright Future (Bjort Framtid) or BF [Gudmundur STEINGRIMSSON]
- Dawn (Dogun) [Benedikt SIGURDARSON]
- Independence Party (Sjalfstaedisflokkurinn) or IP [Bjarni BENEDIKTSSON]
- Left-Green Movement (Vinstrihreyfingin) or LGM [Katrin JAKOBSDOTTIR]
- Pirate Party [Birgitta JONSDOTTIR]
- Progressive Party (Framsoknarflokkurinn) or PP [Sigmundur David GUNNLAUGSSON]
- Rainbow [Atli GISLASON] [Jon BJARNASON]
- Social Democratic Alliance (Samfylkingin) or SDA [Arni Pall ARNASON]
- Solidarity (Samstada) [Lilja MOSESDOTTIR]
International organization participation
Arctic Council, Australia Group, BIS, CBSS, CD, CE, EAPC, EBRD, EFTA, EU (candidate country), FAO, FATF, IAEA, IBRD, ICAO, ICC (national committees), ICRM, IDA, IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO, IMSO, Interpol, IOC, IPU, ISO, ITSO, ITU, ITUC (NGOs), MIGA, NATO, NC, NEA, NIB, NSG, OAS (observer), OECD, OPCW, OSCE, PCA, Schengen Convention, UN, UNCTAD, UNESCO, UPU, WCO, WHO, WIPO, WMO, WTO
Diplomatic representation in the US
- chief of mission:
- Ambassador Gudmundur A. STEFANSSON (since 12 October 2011)
- chancery:
- House of Sweden, 2900 K Street NW #509, Washington, DC 20007
- telephone:
- [1] (202) 265-6653
- FAX:
- [1] (202) 265-6656
- consulate(s) general:
- New York
Diplomatic representation from the US
- chief of mission:
- Ambassador (vacant); Charge d'Affaires Paul O'Friel (since 24 November 2013)
- embassy:
- Laufasvegur 21, 101 Reykjavik
- mailing address:
- US Department of State, 5640 Reykjavik Place, Washington, D.C. 20521-5640
- telephone:
- [354] 595-22 00
- FAX:
- [354] 562-9118
Flag description
- blue with a red cross outlined in white extending to the edges of the flag;
- the vertical part of the cross is shifted to the hoist side in the style of the Dannebrog (Danish flag);
- the colors represent three of the elements that make up the island: red is for the island's volcanic fires, white recalls the snow and ice fields of the island, and blue is for the surrounding ocean
Economy
Iceland's Scandinavian-type social-market economy combines a capitalist structure and free-market principles with an extensive welfare system.
41 fieldsGDP - composition, by sector of origin(2013 est.)
Trading partnersexports left, imports right
By end use% of GDP
Economy - overview
Iceland's Scandinavian-type social-market economy combines a capitalist structure and free-market principles with an extensive welfare system. Prior to the 2008 crisis, Iceland had achieved high growth, low unemployment, and a remarkably even distribution of income. The economy depends heavily on the fishing industry, which provides 40% of export earnings, more than 12% of GDP, and employs nearly 5% of the work force.
It remains sensitive to declining fish stocks as well as to fluctuations in world prices for its main exports: fish and fish products, aluminum, and ferrosilicon. Iceland's economy has been diversifying into manufacturing and service industries in the last decade, particularly within the fields of software production, biotechnology, and tourism.
In fall 2013, the Icelandic government approved a joint application by Icelandic, Chinese and Norwegian energy firms to conduct oil exploration off Iceland’s northeast coast. Abundant geothermal and hydropower sources have attracted substantial foreign investment in the aluminum sector, boosted economic growth, and sparked some interest from high-tech firms looking to establish data centers using cheap green energy, although the financial crisis has put several investment projects on hold.
Much of Iceland's economic growth in recent years came as the result of a boom in domestic demand following the rapid expansion of the country's financial sector. Domestic banks expanded aggressively in foreign markets, and consumers and businesses borrowed heavily in foreign currencies, following the privatization of the banking sector in the early 2000s.
Worsening global financial conditions throughout 2008 resulted in a sharp depreciation of the krona vis-a-vis other major currencies. The foreign exposure of Icelandic banks, whose loans and other assets totaled more than 10 times the country's GDP, became unsustainable. Iceland's three largest banks collapsed in late 2008.
The country secured over $10 billion in loans from the IMF and other countries to stabilize its currency and financial sector, and to back government guarantees for foreign deposits in Icelandic banks. GDP fell 6.8% in 2009, and unemployment peaked at 9.4% in February 2009. Since the collapse of Iceland's financial sector, government economic priorities have included: stabilizing the krona, implementing capital controls, reducing Iceland's high budget deficit, containing inflation, addressing high household debt, restructuring the financial sector, and diversifying the economy.
Three new banks were established to take over the domestic assets of the collapsed banks. Two of them have foreign majority ownership, while the State holds a majority of the shares of the third. Iceland began making payments to the UK, the Netherlands, and other claimants in late 2011 following Iceland's Supreme Court ruling that upheld 2008 emergency legislation that gives priority to depositors for compensation from failed Icelandic banks.
Iceland owes British and Dutch authorities approximately $5.5 billion for compensating British and Dutch citizens who lost deposits in Icesave when parent bank Landsbanki failed in 2008. Iceland began accession negotiations with the EU in July 2010, but decided in mid-2013 to suspend negotiations with the EU because of concern about losing control over fishing resources and worries over the ongoing Eurozone crisis.
Gross national saving
15.4% of GDP (2013 est.) · 9.3% of GDP (2012 est.) · 8.1% of GDP (2011 est.) country comparison to the world: 107
Industries
- fish processing;
- aluminum smelting, ferrosilicon production;
- geothermal power, hydropower, tourism
Distribution of family income - Gini index
28 (2006) · 25 (2005) country comparison to the world: 126
Central bank discount rate
5.4% (31 January 2012 est.) · 5.75% (31 December 2010 est.) country comparison to the world: 62
Commercial bank prime lending rate
9.3% (31 December 2013 est.) · 8.33% (31 December 2012 est.) country comparison to the world: 108
Stock of narrow money
$3.876 billion (31 December 2013 est.) · $3.562 billion (31 December 2012 est.) country comparison to the world: 108
Stock of broad money
$7.152 billion (31 December 2012 est.) · $7.006 billion (31 December 2012 est.) country comparison to the world: 115
Stock of domestic credit
$19.35 billion (31 December 2013 est.) · $18.96 billion (31 December 2012 est.) country comparison to the world: 81
Current account balance
-$100 million (2013 est.) · -$740 million (2012 est.) country comparison to the world: 75
Reserves of foreign exchange and gold
$5.604 billion (31 December 2013 est.) · $4.192 billion (31 December 2012 est.) country comparison to the world: 90
Debt - external
$102 billion (31 December 2012 est.) · $110.8 billion (31 December 2011 est.) country comparison to the world: 47
Exchange rates
Icelandic kronur (ISK) per US dollar - 123.7 (2013 est.) · 125.08 (2012 est.) · 122.24 (2010 est.) · 123.64 (2009) · 85.619 (2008)
Energy
23 fieldsInstalled generating capacity, 2.579 million kW(2010 est.)
Communications
7 fieldsTelephone system
- general assessment:
- telecommunications infrastructure is modern and fully digitized, with satellite-earth stations, fiber-optic cables, and an extensive broadband network
- domestic:
- liberalization of the telecommunications sector beginning in the late 1990s has led to increased competition especially in the mobile services segment of the market
- international:
- country code - 354;
- the CANTAT-3 and FARICE-1 submarine cable systems provide connectivity to Canada, the Faroe Islands, UK, Denmark, and Germany;
- a planned new section of the Hibernia-Atlantic submarine cable will provide additional connectivity to Canada, US, and Ireland;
- satellite earth stations - 2 Intelsat (Atlantic Ocean), 1 Inmarsat (Atlantic and Indian Ocean regions);
- note - Iceland shares the Inmarsat earth station with the other Nordic countries (Denmark, Finland, Norway, and Sweden) (2011)
Broadcast media
- state-owned public TV broadcaster operates 1 TV channel nationally;
- several privately owned TV stations broadcast nationally and roughly another half-dozen operate locally;
- about one-half the households utilize multi-channel cable or satellite TV services;
- state-owned public radio broadcaster operates 2 national networks and 4 regional stations;
- 2 privately owned radio stations operate nationally and another 15 provide more limited coverage (2007)
Transportation
6 fieldsAirports by runway lengthunpaved only
Roadways
- total:
- 12,890 km
country comparison to the world: 126
- paved/oiled gravel:
- 4,782 km (does not include urban roads)
- unpaved:
- 8,108 km (2012)
Merchant marine
- total:
- 2
country comparison to the world: 144
- by type:
- passenger/cargo 2
- registered in other countries:
- 19 (Antigua and Barbuda 10, Belize 1, Faroe Islands 4, Finland 1, Gibraltar 1, Norway 2) (2010)
Military
No regular military forces; Icelandic National Police; Icelandic Coast Guard (2013)
6 fieldsMilitary branches
- no regular military forces;
- Icelandic National Police;
- Icelandic Coast Guard (2013)
Military - note
- Iceland has no standing military force;
- all US military forces in Iceland were withdrawn as of October 2006;
- defense of Iceland remains a NATO commitment and NATO maintains an air policing presence in Icelandic airspace;
- Iceland participates in international peacekeeping missions with the civilian-manned Icelandic Crisis Response Unit (ICRU) (2011)
Transnational Issues
2 fieldsDisputes - international
- Iceland, the UK, and Ireland dispute Denmark's claim that the Faroe Islands' continental shelf extends beyond 200 nm;
- the European Free Trade Association Surveillance Authority filed a suit against Iceland, claiming the country violated the European Economic Area agreement in failing to pay minimum compensation to Icesave depositors
Cite this entry
Central Intelligence Agency. “Iceland.” The World Factbook 2014. Archived by The Factbook, thefactbook.org/iceland/2014.