Editing Iceland (section)

==History==
{{main|History of Iceland}}
{{For timeline|Timeline of Icelandic history}}

===874–1262: settlement and Commonwealth===
{{see also|Settlement of Iceland|Icelandic Commonwealth|Christianisation of Iceland}}
[[File:Ingolf by Raadsig.jpg|thumb|[[Ingólfr Arnarson]] (modern Icelandic: ''Ingólfur Arnarson''), the first permanent Scandinavian settler]]
According to both {{Lang|is|[[Landnámabók]]}} and {{Lang|is| [[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 [[Southern Peninsula (Iceland)|Reykjanes peninsula]]. [[Carbon dating]] indicates that it was abandoned sometime between 770 and 880.<ref>[http://www.icelandreview.com/icelandreview/daily_news/A_New_View_on_the_Origin_of_First_Settlers_in_Iceland_0_378670.news.aspx New View on the Origin of First Settlers in Iceland] {{webarchive |url=https://web.archive.org/web/20110605235513/http://www.icelandreview.com/icelandreview/daily_news/A_New_View_on_the_Origin_of_First_Settlers_in_Iceland_0_378670.news.aspx |date=5 June 2011}}, ''Iceland Review Online'', 4 June 2011. Retrieved 16 June 2011.</ref> In 2016, archaeologists uncovered a [[longhouse]] in [[Stöðvarfjörður]] that may date to as early as 800.<ref>{{cite news |last=Hafstad |first=Vala |date=15 September 2016 |title=Major Archeological Find in Iceland |url=http://icelandreview.com/news/2016/09/15/major-archeological-find-iceland |newspaper=[[Iceland Review]] |access-date=16 September 2016 |archive-url=https://web.archive.org/web/20160915122754/http://icelandreview.com/news/2016/09/15/major-archeological-find-iceland |archive-date=15 September 2016 |url-status=dead}}</ref>

Swedish Viking explorer [[Garðar Svavarsson]] was the first to circumnavigate Iceland in 870 and establish that it was an island.<ref>[http://www.ancientworlds.net/aw/Article/1066869 The History of Viking Iceland] {{webarchive |url=https://web.archive.org/web/20120203211850/http://www.ancientworlds.net/aw/Article/1066869 |date=3 February 2012}}, ''Ancient Worlds'', 31 May 2008. Retrieved 10 November 2013.</ref> 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 permanent residents of Iceland to be documented.<ref>[http://www.gardarsholmur.is/iceland-and-the-history/ Iceland and the history] {{webarchive |url=https://web.archive.org/web/20131110020535/http://www.gardarsholmur.is/iceland-and-the-history/ |date=10 November 2013}}, ''The Gardarsholm Project'', 29 July 2012. Retrieved 10 November 2013.</ref><ref>[http://visindavefur.is/svar.php?id=48331 Hvers vegna hefur Náttfara ekki verið hampað sem fyrsta landnámsmanninum?] {{Webarchive|url=https://web.archive.org/web/20141027173727/http://visindavefur.is/svar.php?id=48331 |date=27 October 2014 }}, ''University of Iceland: The Science Web'', 7 July 2008. Retrieved 10 November 2013.</ref>

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 [[thrall]]s, many of whom were [[Irish people|Irish]] or [[Scottish people|Scottish]].<ref>Historical Dictionary of the Vikings By Katherine Holman p252 scarecrow press 2003 discusses that both Scottish and Irish slaves were in Iceland</ref> 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 [[Norse colonization of Greenland|settlement of Greenland]] starting in 986.<ref>Kudeba, N. (19 April 2014). ''Chapter 5 – Norse Explorers from Erik the Red to Leif Erikson – Canadian Explorers''. Retrieved from The History of Canada: {{cite web |url=http://www.thehistoryofcanadapodcast.com/norse-explorers/ |title=Chapter 5 – Norse Explorers from Erik the Red to Leif Erikson – Canadian Explorers &#124; the History of Canada |access-date=22 April 2014 |url-status=dead |archive-url=https://web.archive.org/web/20140508030929/http://www.thehistoryofcanadapodcast.com/norse-explorers/ |archive-date=8 May 2014}}</ref> The period of these early settlements coincided with the [[Medieval Warm Period]], when temperatures were similar to those of the early 20th century.<ref>{{cite journal |last1=Patterson |first1=W.P. |last2=Dietrich |first2=K.A. |last3=Holmden |first3=C. |last4=Andrews |first4=J.T. |title=Two millennia of North Atlantic seasonality and implications for Norse colonies |journal=Proceedings of the National Academy of Sciences |date=8 March 2010 |volume=107 |issue=12 |pages=5306–5310 |doi=10.1073/pnas.0902522107 |pmid=20212157 |pmc=2851789 |bibcode=2010PNAS..107.5306P|doi-access=free | issn=0027-8424}}</ref> At this time about 25% of Iceland was covered with forest, compared to 1% in the present day.<ref>Magnusson, M. (2003) ''The Vikings''. Tempus. {{ISBN|0752426990}}. pp. 188–191</ref> Christianity was adopted [[Christianisation of Iceland|by consensus]] around 999–1000, although [[Norse paganism]] persisted among segments of the population for some years afterward.<ref>{{cite book |url=https://books.google.com/books?id=qx7Tvd99xVAC&pg=PAPA138 |title=Modern Paganism in World Cultures: Comparative Perspectives |page=138 |publisher=ABC-CLIO |author=Michael Strmiska |date=12 December 2005 |isbn=978-1-85109-608-4 |access-date=30 November 2018 |archive-date=10 June 2024 |archive-url=https://web.archive.org/web/20240610032721/https://books.google.com/books?id=qx7Tvd99xVAC&pg=PAPA138 |url-status=live }}</ref>

===Iceland as a possession===
====The Middle Ages====
{{see also|Age of the Sturlungs}}
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.<ref>{{cite web |url=http://dannyreviews.com/h/Iceland.html |title=The History of Iceland (Gunnar Karlsson)&nbsp;– book review |publisher=Dannyreviews.com |access-date=10 February 2010 |archive-date=28 July 2011 |archive-url=https://web.archive.org/web/20110728002528/http://dannyreviews.com/h/Iceland.html |url-status=live }}</ref> The culmination of these struggles resulted in the signing of the Old Covenant ([[Old Covenant (Iceland)|Gamli sáttmáli]]) in 1262–1264, bringing [[History of Iceland|Iceland under Norwegian rule]].<ref>Coroban, Costel (2018). ''Ideology and Power in Norway and Iceland, 1150-1250''. Newcastle upon Tyne: Cambridge Scholars Publishing. p. 2. {{ISBN|9781527506268}}</ref>

Environmental challenges further impacted [[History of Iceland|medieval Icelandic society]].<ref>{{Cite web |last=Medievalists.net |date=2019-02-06 |title=What was farming like in medieval Iceland? |url=https://www.medievalists.net/2019/02/farming-medieval-iceland/ |access-date=2025-04-10 |website=Medievalists.net |language=en-US}}</ref> 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.<ref>{{Cite web |last=developer |first=M. Özgür NevresI am a software |last2=University |first2=a science enthusiast I. was graduated from the Istanbul Technical |last3=past |first3=Computer Engineering In the |last4=Earth |first4=I. worked at the Istanbul Technical University Science Center as a science instructor I. write about the planet |last5=Website |first5=Science on This |last6=cats |first6=ourplnt com I. am also an animal lover! I. take care of stray |last7=Patreon |first7=dogs This website's all income goes directly to our furry friends Please consider supporting me on |last8=animals! |first8=so I. can help more |date=2018-04-03 |title=Iceland is growing new forests for the first time in 1,000 years - Our Planet |url=https://ourplnt.com/iceland-forests-1000-years/ |access-date=2025-04-10 |website=ourplnt.com |language=en-us}}</ref>

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]], beginning around 1300, brought colder and more unpredictable weather, further shortening growing seasons and making farming more challenging.<ref>Miller, Gifford H.; Geirsdóttir, Áslaug; Zhong, Yafang; Larsen, Darren J.; [[Bette Otto-Bliesner|Otto-Bliesner, Bette L.]]; [[Marika Holland|Holland, Marika M.]]; Bailey, David A.; Refsnider, Kurt A.; Lehman, Scott J.; Southon, John R.; Anderson, Chance; Björnsson, Helgi; Thordarson, Thorvaldur (30 January 2012). "Abrupt onset of the Little Ice Age triggered by volcanism and sustained by sea-ice/ocean feedbacks". ''[[Geophysical Research Letters]]''. '''39''' (2): n/a. [[Bibcode (identifier)|Bibcode]]:2012GeoRL..39.2708M. [[CiteSeerX (identifier)|CiteSeerX]] 10.1.1.639.9076. [[Doi (identifier)|doi]]:10.1029/2011GL050168. [[S2CID (identifier)|S2CID]] 15313398</ref><ref>{{Cite web |date=2018-06-13 |title=Farmsteads and Agriculture |url=https://fjorntheskald.com/2018/06/13/farmsteads-and-agriculture/ |access-date=2025-04-10 |website=Fjorn the Skald |language=en}}</ref>

The Black Death reached Iceland in 1402–1404 and again in 1494–1495, with devastating effects.<ref>Pulsiano, Phillip and Wolf, Kirsten (1993) ''[https://books.google.com/books?id=d-XiZO8V4qUC&pg=PA312 Medieval Scandinavia: An Encyclopedia] {{Webarchive|url=https://web.archive.org/web/20240610032723/https://books.google.com/books?id=d-XiZO8V4qUC&pg=PA312#v=onepage&q&f=false |date=10 June 2024 }}''. [[Taylor & Francis]]. p. 312. {{ISBN|0-8240-4787-7}}</ref> he 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.<ref>{{cite news |last=Maddicott |first=J.R. |title=6th–10th century AD |url=http://findarticles.com/p/articles/mi_m2279/is_n156/ai_20059971/pg_14 |publisher=Findarticles.com |date=2 June 2009 |page=14 |access-date=10 February 2010 |url-status=dead |archive-url=http://arquivo.pt/wayback/20091001083931/http://findarticles.com/p/articles/mi_m2279/is_n156/ai_20059971/pg_14 |archive-date=1 October 2009}}</ref>

====Reformation and the Early Modern period====
{{see also|Icelandic Reformation|Danish trade monopoly in Iceland|Móðuharðindin}}
[[File:Bolungarvik 02.jpg|thumb|left|''Ósvör'', a replica of an old fishing outpost outside [[Bolungarvík]]]]
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 Catholic bishop of [[Hólar]], was beheaded in 1550 along with two of his sons. The country subsequently became officially Lutheran, and Lutheranism has since remained the dominant religion.
[[File:Gerardi Mercatoris Atlas, sive, Cosmographicae Meditationes de Fabrica Mundi et Fabricati Figura (24696368309).jpg|thumb|A map of Iceland published in the early 17th century by [[Gerardus Mercator]]]]
In the 17th and 18th centuries, Denmark imposed [[Danish–Icelandic Trade Monopoly|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 casualties.<ref>{{cite news |last1=Þorsteinn |first1=Helgason |title=Hvaða heimildir eru til um Tyrkjaránið? |trans-title=What are the sources of the Turkish Abductions? |url=https://www.visindavefur.is/svar.php?id=5738 |access-date=9 March 2021 |publisher=University of Iceland |date=28 March 2006 |language=Icelandic |archive-date=17 April 2021 |archive-url=https://web.archive.org/web/20210417185140/https://www.visindavefur.is/svar.php?id=5738 |url-status=live }}</ref><ref>{{cite book |last=Davis |first=Robert C. |title=Christian Slaves, Muslim Masters: White Slavery in the Mediterranean, the Barbary Coast, and Italy, 1500–1800 |url=https://books.google.com/books?id=5q9zcB3JS40C&pg=PA7 |publisher=Palgrave Macmillan |year=2003 |pages=7ff |isbn=978-0-333-71966-4 |access-date=27 June 2015 |archive-date=10 June 2024 |archive-url=https://web.archive.org/web/20240610032722/https://books.google.com/books?id=5q9zcB3JS40C&pg=PA7 |url-status=live }}</ref> The [[1707–08 Iceland smallpox epidemic]] is estimated to have killed a quarter to a third of the population.<ref>{{cite web |url=http://iceland.vefur.is/iceland_history/history.htm |title=Iceland: Milestones in Icelandic History |publisher=Iceland.vefur.is |access-date=10 February 2010 |archive-date=29 September 2013 |archive-url=https://web.archive.org/web/20130929074613/http://iceland.vefur.is/iceland_history/history.htm |url-status=live }}</ref><ref>{{cite book |last=Crosby |first=Alfred W. |year=2004 |url=https://books.google.com/books?id=Phtqa_3tNykC&pg=PA52 |title=Ecological imperialism: the biological expansion of Europe, 900–1900 |publisher=[[Cambridge University Press]] |page=52 |isbn=0-521-54618-4 |access-date=27 June 2015 |archive-date=10 June 2024 |archive-url=https://web.archive.org/web/20240610032722/https://books.google.com/books?id=Phtqa_3tNykC&pg=PA52#v=onepage&q&f=false |url-status=live }}</ref> In 1783 the [[Laki]] volcano erupted, with devastating effects.<ref>"{{cite news |url=http://news.bbc.co.uk/2/hi/science/nature/6276291.stm |title=When a killer cloud hit Britain |work=BBC News |date=January 2007 |access-date=18 April 2010 |archive-date=7 January 2018 |archive-url=https://web.archive.org/web/20180107034754/http://news.bbc.co.uk/2/hi/science/nature/6276291.stm |url-status=live }}</ref> In the years following the eruption, known as the [[Mist Hardships]] ({{langx|is|Móðuharðindin}}), over half of all livestock in the country died. Around a quarter of the population starved to death in the ensuing [[famine]].<ref>{{cite web |url=http://edition.cnn.com/2010/OPINION/04/16/darrigo.volcano.impact/index.html |title=How volcanoes can change the world |publisher=[[CNN]] |access-date=27 October 2014 |archive-date=30 January 2011 |archive-url=https://web.archive.org/web/20110130140142/http://edition.cnn.com/2010/OPINION/04/16/darrigo.volcano.impact/index.html |url-status=live }}</ref>

====1814–1918: independence movement====
{{see also|Icelandic independence movement|Fjölnir (journal)}}
In 1814, following the [[Napoleonic Wars]], Denmark-Norway was broken up into two separate kingdoms via 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|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.<ref>{{cite web |url=http://www.iht.com/articles/2008/12/05/business/iceland.php |title=For Iceland, an exodus of workers |work=[[The New York Times]] |date=5 December 2008 |access-date=10 February 2010 |url-status=dead |archive-url=https://web.archive.org/web/20081211074725/http://www.iht.com/articles/2008/12/05/business/iceland.php |archive-date=11 December 2008}}</ref>

A national consciousness arose in the first half of the 19th century, inspired by [[Romanticism|romantic]] and [[Nationalism|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, Denmark granted Iceland a constitution and limited home rule. This 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===
{{see also|Kingdom of Iceland|Invasion of Iceland|Iceland in World War II}}
[[File:HMS Berwick (65).jpg|left|thumb|{{HMS|Berwick|65|6}} led the British [[invasion of Iceland]].]]

The [[Danish–Icelandic Act of Union]], an agreement with Denmark signed on 1 December 1918 and valid for 25&nbsp;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.<ref name=":0">{{cite web |url=https://www.icelandicroots.com/post/2014/11/11/the-occupation-of-iceland-during-world-war-ii |title=Icelandic Roots {{!}} Post |website=Icelandic Roots {{!}} Genealogy Ancestry |date=11 November 2014 |access-date=5 April 2019 |archive-date=18 March 2022 |archive-url=https://web.archive.org/web/20220318033638/https://www.icelandicroots.com/post/2014/11/11/the-occupation-of-iceland-during-world-war-ii |url-status=live }}</ref> A month later, British armed forces conducted [[Operation Fork]], the invasion and occupation of the country, violating Icelandic [[Neutrality (international relations)|neutrality]].<ref>{{cite web |url=https://icelandmonitor.mbl.is/news/politics_and_society/2015/05/12/history_british_forces_occupy_iceland/ |title=History: British forces occupy Iceland |website=Iceland Monitor |access-date=5 April 2019 |archive-url=https://web.archive.org/web/20191203172541/https://icelandmonitor.mbl.is/news/politics_and_society/2015/05/12/history_british_forces_occupy_iceland/ |archive-date=3 December 2019 |url-status=dead}}</ref> In 1941, the Government of Iceland, friendly to Britain, invited the then-neutral United States to take over its defence so that Britain could use its troops elsewhere.<ref name=":0" />

===1944–present: Republic of Iceland===
{{see also|Icelandic constitutional referendum, 1944|Iceland in the Cold War|Cod Wars}}
[[File:Scylla-Odinn.jpg|thumb|British warship {{HMS|Scylla}} (right) collides with Icelandic coast guard vessel {{ship|ICGV|Óðinn}} in the Atlantic Ocean during the [[Cod Wars|Third Cod War]].]]

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.<ref>{{cite video |title=Allies Study Post-War Security Etc. |year=1944 |url=https://archive.org/details/gov.archives.arc.39024 |publisher=[[Universal Newsreel]] |access-date=21 February 2012}}</ref> Iceland formally became a republic on 17 June 1944, with [[Sveinn Björnsson]] as its first president.

In 1946, the US Defence Force Allied left Iceland. The nation formally became a member of [[NATO]] on 30 March 1949, amid [[1949 anti-NATO riot in Iceland|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]] programme, through which Icelanders received the most aid per capita of any European country (at US$209, with the war-ravaged Netherlands a distant second at US$109).<ref>{{cite web |url=http://visindavefur.hi.is/svar.asp?id=3411 |title=Hversu há var Marshallaðstoðin sem Ísland fékk eftir seinni heimsstyrjöld? |language=is |date=13 May 2003 |work=Vísindavefurinn |access-date=27 October 2014 |archive-date=25 May 2013 |archive-url=https://web.archive.org/web/20130525113749/http://visindavefur.hi.is/svar.asp?id=3411 |url-status=live }}</ref><ref>{{cite book |last1=Müller |first1=Margrit |last2=Myllyntaus |first2=Timo |title=Pathbreakers: Small European Countries Responding to Globalisation and Deglobalisation |url=https://books.google.com/books?id=zdXTV8xO3xQC&pg=PA385 |publisher=Peter Lang |year=2007 |pages=385– |isbn=978-3-03911-214-2 |access-date=27 June 2015 |archive-date=10 June 2024 |archive-url=https://web.archive.org/web/20240610032723/https://books.google.com/books?id=zdXTV8xO3xQC&pg=PA385#v=onepage&q&f=false |url-status=live }}</ref>

[[Vigdís Finnbogadóttir]] assumed Iceland's presidency on 1 August 1980, making her the first elected female head of state in the world.<ref>{{cite news |title=Vigdis Finnbogadottir, the world's first elected female president |url=https://www.france24.com/en/20200731-vigdis-finnbogadottir-the-world-s-first-elected-female-president |work=France 24 |date=31 July 2020 |language=en |access-date=14 December 2021 |archive-date=8 April 2022 |archive-url=https://web.archive.org/web/20220408182639/https://www.france24.com/en/20200731-vigdis-finnbogadottir-the-world-s-first-elected-female-president |url-status=live }}</ref>

The 1970s were marked by the [[Cod Wars]]—several disputes with the United Kingdom over Iceland's extension of its fishing limits to {{convert|200|nmi|km|abbr=on}} offshore. Iceland hosted a [[Reykjavík Summit|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 [[Dissolution of the Soviet Union|broke away]] from the USSR. Throughout the 1990s, the country expanded its international role and developed a foreign policy orientated towards humanitarian and peacekeeping causes. To that end, Iceland provided aid and expertise to various NATO-led interventions in [[Bosnian War|Bosnia]], [[Kosovo War|Kosovo]], and [[Gulf War|Iraq]].<ref>[[#Wilcox|Wilcox and Latif]], p. 29</ref>

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 percent increase in Iceland's [[gross national income]] between 2002 and 2007.<ref name=jackson>{{cite news |work=[[Financial Times]] |first=Robert |last=Jackson |title=The Big Chill |date=15 November 2008}}</ref><ref>{{cite web |url=http://statice.is/?PageID=1267&src=https%3A%2F%2Frannsokn.hagstofa.is%2Fpxen%2FDialog%2Fvarval.asp%3Fma%3DTHJ01000%26ti%3DOverview+of+Gross+Domestic+Product+and+Gross+National+Product+1945-2013%26path%3D..%2FDatabase%2Fthjodhagsreikningar%2Flandsframleidsla%2F%26lang%3D1%26units%3DIndex%2Fpercent%2Fnumber |title=Home – Hagstofa |work=Hagstofa |access-date=23 October 2014 |archive-date=27 October 2014 |archive-url=https://web.archive.org/web/20141027183318/http://statice.is/?PageID=1267&src=https%3A%2F%2Frannsokn.hagstofa.is%2Fpxen%2FDialog%2Fvarval.asp%3Fma%3DTHJ01000%26ti%3DOverview+of+Gross+Domestic+Product+and+Gross+National+Product+1945-2013%26path%3D..%2FDatabase%2Fthjodhagsreikningar%2Flandsframleidsla%2F%26lang%3D1%26units%3DIndex%2Fpercent%2Fnumber |url-status=live }}</ref>

====Economic boom and crisis====
{{further|2008–2011 Icelandic financial crisis|2009 Icelandic financial crisis protests}}
In 2003–2007, following 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.<ref name=Lewis/> It was quickly becoming one of the most prosperous countries in the world, but was hit hard by a [[2008–2011 Icelandic financial crisis|major financial crisis]].<ref name=Lewis>{{cite magazine |last=Lewis |first=Michael |title=Wall Street on the Tundra |url=https://www.vanityfair.com/politics/features/2009/04/iceland200904?printable=true&currentPage=all |magazine=Vanity Fair |date=April 2009 |access-date=20 February 2020 |archive-date=24 December 2014 |archive-url=https://web.archive.org/web/20141224103519/http://www.vanityfair.com/politics/features/2009/04/iceland200904?printable=true&currentPage=all |url-status=live }}</ref> The crisis resulted in the greatest migration from Iceland since 1887, with a net emigration of 5,000 people in 2009.<ref name="nordregio.se">{{cite journal |title=Iceland lost almost 5000 people in 2009 |journal=Journal of Nordregio |url=http://www.nordregio.se/Global/JoN/JoN%202010/Jon%201%202010/JoN%201_2010.pdf |volume=10 |issue=1 |date=April 2010 |page=18 |access-date=13 September 2011 |archive-url=https://web.archive.org/web/20120315212525/http://www.nordregio.se/Global/JoN/JoN%202010/Jon%201%202010/JoN%201_2010.pdf |archive-date=15 March 2012 |url-status=dead }}</ref>

==== Since 2012 ====

Iceland's economy stabilised under the government of [[Jóhanna Sigurðardóttir]] and grew by 1.6% in 2012.<ref>{{cite web |url=http://www.vb.is/frettir/81718/ |title=Viðskiptablaðið – Hagvöxtur 2012 mun minni en spár gerðu ráð fyrir |language=is |publisher=Vb.is |date=8 March 2013 |access-date=14 April 2013 |archive-date=28 December 2014 |archive-url=https://web.archive.org/web/20141228043150/http://www.vb.is/frettir/81718/ |url-status=dead }}</ref> The centre-right [[Independence Party (Iceland)|Independence Party]] was returned to power in coalition with the [[Progressive Party (Iceland)|Progressive Party]] in the 2013 election.<ref>{{cite news |url=https://www.bbc.co.uk/news/world-europe-22320282 |title=Iceland vote: Centre-right opposition wins election |work=BBC News |date=28 April 2013 |access-date=22 June 2018 |archive-date=8 March 2018 |archive-url=https://web.archive.org/web/20180308151218/http://www.bbc.co.uk/news/world-europe-22320282 |url-status=live }}</ref> In the following years, Iceland saw 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.<ref>{{cite web |url=https://www.nytimes.com/2016/04/06/world/europe/panama-papers-iceland.html |archive-url=https://ghostarchive.org/archive/20220103/https://www.nytimes.com/2016/04/06/world/europe/panama-papers-iceland.html |archive-date=2022-01-03 |url-access=subscription |url-status=live |title=Iceland's Prime Minister Steps Down Amid Panama Papers Scandal |work=The New York Times |date=April 2016}}{{cbignore}}</ref> Early elections in 2016 resulted in a right-wing coalition government of the [[Independence Party (Iceland)|Independence Party]], [[Viðreisn]] and [[Bright Future (Iceland)|Bright Future]].<ref>{{cite web |url = https://www.theguardian.com/world/2016/oct/30/iceland-elections-ruling-centre-right-party-pirate-party |title = Iceland elections leave ruling centre-right party in driving seat |work = The Guardian |date = October 2016 |access-date = 28 June 2017 |archive-date = 30 October 2016 |archive-url = https://web.archive.org/web/20161030205656/https://www.theguardian.com/world/2016/oct/30/iceland-elections-ruling-centre-right-party-pirate-party |url-status = live }}</ref> This government fell when Bright Future quit the coalition due to a scandal involving then-Prime Minister [[Bjarni Benediktsson (born 1970)|Bjarni Benediktsson]]'s father's letter of support for a convicted child sex offender.<ref>{{cite web |url = https://www.independent.co.uk/news/world/europe/iceland-paedophile-brought-down-government-bright-future-coalition-hjalti-sigurjon-hauksson-benedikt-a7952721.html |title = How Iceland's government was brought down by a letter from PM's father demanding paedophile's pardon |work = The Independent |date = September 2017 |access-date = 30 May 2018 |archive-date = 19 September 2017 |archive-url = https://web.archive.org/web/20170919235908/http://www.independent.co.uk/news/world/europe/iceland-paedophile-brought-down-government-bright-future-coalition-hjalti-sigurjon-hauksson-benedikt-a7952721.html |url-status = live }}</ref> [[2017 Icelandic parliamentary election|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]].<ref>{{cite web |url = https://www.nytimes.com/2017/11/30/world/europe/iceland-prime-minister-katrin-jakobsdottir.html |title = An Environmentalist Is Iceland's New Prime Minister |work = The New York Times |date = November 2017 |access-date = 30 May 2018 |archive-date = 24 June 2022 |archive-url = https://web.archive.org/web/20220624192014/https://www.nytimes.com/2017/11/30/world/europe/iceland-prime-minister-katrin-jakobsdottir.html |url-status = live }}</ref>

After the 2021 parliamentary [[2021 Icelandic parliamentary election|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.<ref>{{cite news |title=New Government of Iceland Takes Office |url=https://icelandmonitor.mbl.is/news/politics_and_society/2021/11/29/new_government_of_iceland_takes_office/ |work=Iceland Monitor |date=29 November 2021 |access-date=14 December 2021 |archive-date=8 April 2022 |archive-url=https://web.archive.org/web/20220408182642/https://icelandmonitor.mbl.is/news/politics_and_society/2021/11/29/new_government_of_iceland_takes_office/ |url-status=live }}</ref> In April 2024, Bjarni Benediktsson of the Independence party succeeded Katrín Jakobsdóttir as prime minister.<ref>{{cite news |title=Iceland appoints Bjarni Benediktsson to replace Katrín Jakobsdóttir as PM |url=https://www.theguardian.com/world/2024/apr/10/iceland-conservative-foreign-minister-replaces-jakobsdottir-as-pm |access-date=21 December 2024}}</ref> In November 2024, centre-left [[Social Democratic Alliance]] became the biggest party in a [[2024 Icelandic parliamentary election|snap election]], meaning Social Democratic [[Kristrún Frostadóttir|Kristrun Frostadottir]] became the next Prime Minister of Iceland.<ref>{{cite news |title=Iceland gets new government under Social Democrat Frostadottir |url=https://www.reuters.com/world/europe/iceland-presents-new-government-with-social-democratic-leader-frostadottir-pm-2024-12-21/ |access-date=21 December 2024}}</ref>