Iceland (Lonely Planet, 7th Edition) - Fran Parnell [13]
On 9 April 1940 Denmark was occupied by Germany, prompting the Alþing to take control of Iceland’s foreign affairs once more. A year later, on 17 May 1941, the Icelanders requested complete independence. The formal establishment of the Republic of Iceland finally took place at Þingvellir on 17 June 1944 – now celebrated as Independence Day.
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WWII & THE USA MOVES IN
Iceland’s total lack of military force worried the Allied powers and so in May 1940 Britain, most vulnerable to a German-controlled Iceland, sent in forces to occupy the island. Iceland had little choice but to accept the situation, but the country’s economy profited from British construction projects and spending.
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Iceland has the highest density of mobile-phone use in the world – there are more mobiles in use than there are people.
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When the British troops withdrew in 1941 the government allowed American troops to move in, on the understanding that they would move out at the end of the war. Although the US military left in 1946, it retained the right to reestablish a base at Keflavík should war threaten. After the war, and back under their own control, Icelanders were reluctant to submit to any foreign power. When the government was pressured into becoming a founding member of NATO in 1949, riots broke out in Reykjavík. The government agreed to the proposition on the conditions that Iceland would never take part in offensive action and that no foreign military troops would be based in the country during peacetime.
These conditions were soon broken. War with Korea broke out in 1950, and in 1951 at NATO’s request the US, jumpy about the Soviet threat, once again took responsibility for the island’s defence. US military personnel and technology at the Keflavík base continued to increase over the next four decades, as Iceland served as an important Cold War monitoring station. The controversial US military presence in Iceland only ended in September 2006, when the base at Keflavík finally closed.
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In 2002 scientists discovered the world’s second-smallest creature, Nanoarchaeum equitans, living in near-boiling water in a hydrothermal vent off the north coast of Iceland.
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MODERN ICELAND
Following the Cold War, Iceland went through a period of growth, rebuilding and modernisation. The Ring Road was completed in 1974 – opening up transport links to the remote southeast – and projects such as the Krafla power station in the northeast and the Svartsengi power plant near Reykjavík were developed. A boom in the fishing industry saw Iceland extend its fishing limit in the 1970s to 200 miles (322km), precipitating the ‘cod war’ with Britain.
The fishing industry has always been vital to Iceland, although it’s had its ups and downs – quotas were reduced in the 1990s so stocks could regenerate after overfishing. The industry went into recession, leading to an unemployment rate of 3% (a previously unheard-of level in Iceland) and a sharp drop in the króna. The country slowly began a period of economic regeneration as the fishing industry stabilised. Today the industry still accounts for about half of the country’s GDP, with the total catch valued at around 100 billion krónur in 2009.
In 2003 Iceland resumed whaling as part of a scientific research program, despite a global moratorium on hunts. In 2006 Iceland resumed commercial whaling, in spite of condemnation from around the globe. It’s likely that this will be one of the major issues when its EU membership application, lodged in 2009, is formally considered.
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See the ‘Icelanders are Not Terrorists’ website, www.indefence.is, for a typically Icelandic response to Gordon Brown’s use of antiterrorist laws.
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Iceland’s huge dependence on its fishing industry and on imported goods means that the country has always had relatively high prices and a vulnerable economy prone to fluctuation. Exactly how vulnerable was brought into focus in September