According to ehistorylib, in 2005, Iceland had a population of about 300,000 people and a GDP of $12.5 billion. The economy was largely based on services, fishing, and tourism with the fishing industry being the largest contributor to the country’s economic activity. Unemployment rates were low at around 2%, while poverty levels remained relatively low with an estimated 4% of the population living below the poverty line.
Foreign relations in 2005 were primarily focused on strengthening ties with other European nations, particularly those within the European Union (EU). Iceland was not part of the EU but sought to strengthen its relationship through increased trade and diplomatic cooperation. In addition, Iceland maintained strong political ties with its Nordic neighbors as well as the United States through NATO membership and its continued support for US policies in the region.
Politically, Iceland was a parliamentary republic during this time period with executive power vested in the Prime Minister who was elected by Parliament every four years. The Prime Minister had authority over foreign policy decisions and could veto any legislation passed by Parliament. Furthermore, there were three branches of government: Executive (Prime Minister), Legislative (Parliament) and Judicial (Supreme Court). These branches worked together to ensure that laws were properly enforced throughout the country.
Iceland. The actions of the large Icelandic finance companies aroused debate in Europe during the year. According to Swedish calculations at the end of the summer, Icelandic financial players such as Kaupthing Bank, the retail group Baugur et al. bought companies for the equivalent of SEK 67 billion, mainly in the UK but also in Scandinavia. The scope was considered remarkable given the constraints of the Icelandic economy. Scandinavian experts warned of a “card house effect”, as the purchases resulted in extremely high lending by Icelandic banks. In addition, rumors flourished that Icelandic capital was partly based on the Russian mafia’s money laundering, accusations that were rejected by those concerned.
According to countryaah, Reykjavik is the capital and one of the major cities within the country of Iceland. Several major financial players in the country had problems with justice. A fraud trial against Baugur’s owner and CEO Jón Ásgeir Jóhannesson got a lot of attention during the year, but the prosecution was dropped. The Baugur chief claimed that the allegations were politically motivated, and a newspaper owned by him revealed emails that appeared to show that well-known politicians within the ruling Independence Party had acted against Baugur.
- Also see abbreviationfinder.org for how the acronym IS stands for the country of Iceland and other meanings of this two-letter abbreviation.
Independence Party leader Davíð Oddsson decided in September to leave the policy to become head of the Central Bank of Iceland. Davið Oddsson had long dominated Icelandic politics, among other things. under 13 as prime minister. He had then also been involved in an almost personal feud with Baugur’s owner.
Bobby Fischer, the controversial US former world champion in chess, received Icelandic citizenship during the year. He was thus released from Japanese detention and escaped extradition to the United States, where he was wanted for breaking the boycott against Yugoslavia by playing chess in Belgrade in 1992. Fischer won the World Cup title of Soviet chess player Boris Spasskij in Reykjavík in 1972.
In July 2013, Iceland recognized Palestine as an independent state and thus became the first Western European state to take this step.
Prime Minister Gunnlaugsson was forced to resign from the post in April 2016 after fierce public protests. There was the particular dispute about Gunnlaugsson’s tax evasion that it was revealed live during an interview the Swedish TV program Uppdrag Review made with him. The Panama Papers documented that Gunnlaugsson and his wife had lied about their tax affairs to parliament and the Icelandic tax authorities. The prime minister emigrated from the open-screen interview, widespread popular protests broke out and a few days later he had to resign. The post was taken over by his party mate, Sigurður Ingi Jóhannsson – also from the Progress Party. At the same time, the parliamentary elections to be held in 2017 were speeded up to autumn 2016. In the October elections, the Progress Party lost 11 seats and had to settle for 8. It was thus reduced to the 4th largest party of all. The victors were the Pirate Party, which went 7 mandates up to 10; the newly formed Reform Party which came in with 7 seats; the Red-Greens who went 3 seats to 10; and the Independence Party, which passed 2 terms until 21. Government formation took 3 months, as there were no obvious opportunities for government either on the right or the left. In January, the Independence Party formed a coalition government with the participation of the Reform Party and the Party of Bright Future with Bjarni Benediktsson as prime minister. The government had a minimal majority of just one mandate. After the October elections, 48% of the members of the Parliament were women.
Independent candidate Guðni Th. In June 2016, Jóhannesson won the Icelandic presidential election with 39.1% of the vote. President Grimsson had declared in January that he would not stand for re-election. Jóhannesson quickly became a popular president. One month into his tenure, he received support from 68.6% of the population and by December support had risen to 97%.
1.3 million tourists visited the country in 2016. Three times more than in 2010.
The coalition government collapsed in September 2017 when it was revealed that Prime Minister Bjarni Benediktsson’s father had written a letter recommending that a convicted pedophile’s honor be restored. The letter meant that Bright Future withdrew from the government, which then no longer had a majority. In October, a new parliamentary election was held, the result of which only reinforced the muddy political situation. Not many voices were moved between the wings, but some regrouping took place. The Independence Party went back 5 seats to 21, but was still the largest; The reform party went back 3 seats to 4 and Luminous Future came under the threshold and completely quit. In turn, former criminal prime minister Sigmundur Davíð Gunnlaugsson formed a new party, the Center Party, which came in with 7 seats. On the center-left, the Red-Green Alliance won 1 mandate and got 11; The Social Democracy went up to 4 seats until 7 and the People’s Party came in with 4 seats. In return, the Pirate Party returned 4 seats to 6. The following period, the Red Greens attempted to form a coalition government with a fair majority behind it.