Changes

==Geography==

==Geography==

Iceland is a volcanic island in the North Atlantic Ocean east of Greenland and immediately south of the Arctic Circle. It lies about 4,200 kilometers (2,600 mi.) from New York and 830 kilometers (520 mi.) from Scotland. About 79% of Iceland's land area, which is of recent volcanic origin, consists of glaciers, lakes, a mountainous lava desert (highest elevation 2,000 meters--6,590 ft.--above sea level), and other wasteland. About 28% of the land is used for grazing, and 1% is cultivated. The inhabited areas are on the coast, particularly in the southwest where about 60% of the population lives. Because of the Gulf Stream's moderating influence, the climate is characterized by damp, cool summers and relatively mild but windy winters. In Reykjavík, the average temperature is 11°C (52°F) in July and -1°C (30°F) in January.  

Iceland is a volcanic island in the North Atlantic Ocean east of Greenland and immediately south of the Arctic Circle. It lies about 4,200 kilometers (2,600 mi.) from New York and 830 kilometers (520 mi.) from Scotland. About 79% of Iceland's land area, which is of recent volcanic origin, consists of glaciers, lakes, a mountainous lava desert (highest elevation 2,000 meters—6,590 ft.--above sea level), and other wasteland. About 28% of the land is used for grazing, and 1% is cultivated. The inhabited areas are on the coast, particularly in the southwest where about 60% of the population lives. Because of the Gulf Stream's moderating influence, the climate is characterized by damp, cool summers and relatively mild but windy winters. In Reykjavík, the average temperature is 11 °C (52 °F) in July and -1 °C (30 °F) in January.  

Iceland's territory was augmented by the emergence of the island of [[Surtsey]] from beneath the waves in the years 1963-67, following submarine volcanic eruptions. The island is subject to erosion, and now occupies .54 square miles (1.4 km²), about half its area in 1967.

Iceland's territory was augmented by the emergence of the island of [[Surtsey]] from beneath the waves in the years 1963-67, following submarine volcanic eruptions. The island is subject to erosion, and now occupies .54 square miles (1.4 km²), about half its area in 1967.

*Area: 103,000 sq. km. (39,600 sq. mi.); about the size of Virginia or slightly larger than Ireland.

*Area: 103,000 sq. km. (39,600 sq. mi.); about the size of Virginia or slightly larger than Ireland.

*Cities: Capital--Reykjavík (pop. 117,898). Other towns--Kópavogur (28,665), Hafnarfjörður (24,895), Akureyri (17,278).  

*Cities: Capital—Reykjavík (pop. 117,898). Other towns—Kópavogur (28,665), Hafnarfjörður (24,895), Akureyri (17,278).  

*Terrain: Rugged.  

*Terrain: Rugged.  

*Climate: Maritime temperate.

*Climate: Maritime temperate.

*Highest elevation: Hvannadalshnjúkur at Vatnajökull Glacier, at 2,110 meters (6,923 ft.).  

*Highest elevation: Hvannadalshnjúkur at Vatnajökull Glacier, at 2,110 meters (6,923 ft.).  

==People==

==People==

*Religion: Evangelical Lutheran, 86%.  

*Religion: Evangelical Lutheran, 86%.  

*Language: Icelandic.  

*Language: Icelandic.  

*Education: Compulsory up to age 16. Attendance--99%. Literacy--99.9%.  

*Education: Compulsory up to age 16. Attendance—99%. Literacy—99.9%.  

*Health: Infant mortality rate (2001-2006 average)--2.4/1,000. Life expectancy (2006)--men 79.4 years, women 83 years.  

*Health: Infant mortality rate (2001-2006 average)--2.4/1,000. Life expectancy (2006)--men 79.4 years, women 83 years.  

*Work force (2007, 181,500): Commerce--32.4%; manufacturing--10.2%; fishing/fish processing--4.2%; construction--8.9%; transport and communications--6.3%; agriculture--3.4%; government, education, and health--27.3%; other services--7.1%. Unemployment (2007): 2.3%.  

*Work force (2007, 181,500): Commerce—32.4%; manufacturing—10.2%; fishing/fish processing—4.2%; construction—8.9%; transport and communications—6.3%; agriculture—3.4%; government, education, and health—27.3%; other services—7.1%. Unemployment (2007): 2.3%.  

====Cultural Achievements====

====Cultural Achievements====

==Government==

==Government==

The president, elected to a 4-year term, has limited powers. When Iceland became a republic in 1944, the post of president was created to fill the void left by the Danish king. Although the president is popularly elected and has limited veto powers (he can force a public referendum on a proposed law by refusing to sign it--a power that has only twice been exercised), the expectation is that the president should play the same limited role as a monarch in a traditional parliamentary system.  

The president, elected to a 4-year term, has limited powers. When Iceland became a republic in 1944, the post of president was created to fill the void left by the Danish king. Although the president is popularly elected and has limited veto powers (he can force a public referendum on a proposed law by refusing to sign it—a power that has only twice been exercised), the expectation is that the president should play the same limited role as a monarch in a traditional parliamentary system.  

The prime minister and cabinet exercise most executive functions. The parliament is composed of 63 members, elected every 4 years unless it is dissolved sooner. Suffrage for presidential and parliamentary elections is universal for those 18 and older, and members of the parliament are elected on the basis of parties' proportional representation in six constituencies. The judiciary consists of the Supreme Court, district courts, and various special courts. The constitution protects the judiciary from infringement by the other two branches.  

The prime minister and cabinet exercise most executive functions. The parliament is composed of 63 members, elected every 4 years unless it is dissolved sooner. Suffrage for presidential and parliamentary elections is universal for those 18 and older, and members of the parliament are elected on the basis of parties' proportional representation in six constituencies. The judiciary consists of the Supreme Court, district courts, and various special courts. The constitution protects the judiciary from infringement by the other two branches.  

===Principal Government Officials===

===Principal Government Officials===

*President--Ólafur Ragnar Grímsson

*President—Ólafur Ragnar Grímsson

*Prime Minister--Sigmundur Davíð Gunnlaugsson

*Prime Minister—Sigmundur Davíð Gunnlaugsson

*Foreign Minister--Ingibjörg Sólrún Gísladóttir

*Foreign Minister—Ingibjörg Sólrún Gísladóttir

*Minister of Finance--Árni M. Mathiesen

*Minister of Finance—Árni M. Mathiesen

*Minister of Justice and Ecclesiastical Affairs--Björn Bjarnason

*Minister of Justice and Ecclesiastical Affairs—Björn Bjarnason

*Minister of Agriculture and Fisheries--Einar Kristinn Guðfinnson  

*Minister of Agriculture and Fisheries—Einar Kristinn Guðfinnson  

*Minister of Communications--Kristján L. Möller

*Minister of Communications—Kristján L. Möller

*Minister of Industry and Nordic Cooperation--Össur Skarphéðinsson

*Minister of Industry and Nordic Cooperation—Össur Skarphéðinsson

*Minister for the Environment--Þórunn Sveinbjarnardóttir  

*Minister for the Environment—Þórunn Sveinbjarnardóttir  

*Minister of Commerce--Björgvin G. Sigurðsson

*Minister of Commerce—Björgvin G. Sigurðsson

*Minister of Health--Guðlaugur Þór Þórðarson

*Minister of Health—Guðlaugur Þór Þórðarson

*Minister of Social Affairs--Jóhanna Sigurðardóttir

*Minister of Social Affairs—Jóhanna Sigurðardóttir

*Minister of Education, Science and Culture--Þorgerður Katrín Gunnarsdóttir

*Minister of Education, Science and Culture—Þorgerður Katrín Gunnarsdóttir

*Speaker of Althingi--Sturla Böðvarsson

*Speaker of Althingi—Sturla Böðvarsson

*Ambassador to the U.S.--Albert Jónsson

*Ambassador to the U.S.--Albert Jónsson

*Ambassador to the UN--Hjálmar W. Hannesson

*Ambassador to the UN—Hjálmar W. Hannesson

*Ambassador to NATO--Thorsteinn Ingólfsson

*Ambassador to NATO—Thorsteinn Ingólfsson

*Ambassador to the EU--Stefán Haukur Jóhannesson  

*Ambassador to the EU—Stefán Haukur Jóhannesson  

===Political Conditions===

===Political Conditions===

The centrist agrarian Progressive Party has been a party to government for over 30 years in the past four decades. Its support dropped from 23% in the 1995 parliamentary election to 12% in 2007. The party has dealt with internal instability in the past few years, and power struggles have lead to frequent change in the party's leadership. Chairman Jón Sigurðsson stepped down after the 2007 elections and was replaced by Deputy Chairman Guðni Ágústsson.  

The centrist agrarian Progressive Party has been a party to government for over 30 years in the past four decades. Its support dropped from 23% in the 1995 parliamentary election to 12% in 2007. The party has dealt with internal instability in the past few years, and power struggles have lead to frequent change in the party's leadership. Chairman Jón Sigurðsson stepped down after the 2007 elections and was replaced by Deputy Chairman Guðni Ágústsson.  

Three left-wing parties--the Social Democratic Party, the People's Alliance, and the Women's List--formed an electoral coalition prior to the 1999 parliamentary election in the hope of mounting a credible challenge to the long-dominant Independence Party. But the dream of creating a united left coalition failed when disaffected leftists formed a new splinter party called the Left Green Movement, led by former deputy People's Alliance leader Steingrímur Sigfússon. With this defection, the left coalition won a disappointing 27% of the vote (17 seats) in the 1999 election, four percentage points below what the three parties had won running separately in 1995. Their 31% (20 seats) showing in 2003 recaptured this ground but did not suffice to topple the government. The Left Greens won a respectable 9% of the vote (5 seats) in 2003, but in the 2007 election they improved significantly, with 14% of the total vote (9 seats). Another new faction, the Liberal Party, won just over 7% (4 seats) in 2003 based on its strong opposition to the current fishing management system, and clung to roughly 6% in 2007.  

Three left-wing parties—the Social Democratic Party, the People's Alliance, and the Women's List—formed an electoral coalition prior to the 1999 parliamentary election in the hope of mounting a credible challenge to the long-dominant Independence Party. But the dream of creating a united left coalition failed when disaffected leftists formed a new splinter party called the Left Green Movement, led by former deputy People's Alliance leader Steingrímur Sigfússon. With this defection, the left coalition won a disappointing 27% of the vote (17 seats) in the 1999 election, four percentage points below what the three parties had won running separately in 1995. Their 31% (20 seats) showing in 2003 recaptured this ground but did not suffice to topple the government. The Left Greens won a respectable 9% of the vote (5 seats) in 2003, but in the 2007 election they improved significantly, with 14% of the total vote (9 seats). Another new faction, the Liberal Party, won just over 7% (4 seats) in 2003 based on its strong opposition to the current fishing management system, and clung to roughly 6% in 2007.  

Despite the poor electoral showing in 1999, the three left-wing parties decided to merge formally in 2000, creating a new party, the Social Democratic Alliance, led by Ingibjörg Sólrún Gísladóttir. The party has found it difficult to reconcile the widely varying foreign policy views of its members, which range from strong support for NATO membership to pacifism and a desire for neutrality.  

Despite the poor electoral showing in 1999, the three left-wing parties decided to merge formally in 2000, creating a new party, the Social Democratic Alliance, led by Ingibjörg Sólrún Gísladóttir. The party has found it difficult to reconcile the widely varying foreign policy views of its members, which range from strong support for NATO membership to pacifism and a desire for neutrality.  

Iceland's current President is Ólafur Ragnar Grímsson, a former political science professor who led the far-left People's Alliance in 1987-95 and served as Finance Minister in 1988-91. Although Grímsson won office with only a 41% plurality in 1996, he was not challenged for re-election in 2000. He was re-elected again on June 26, 2004. In 2008 Grímsson was re-elected by default, as no other candidate declared their intention to run against him. Since no opposition candidate was declared, the presidential election scheduled for June 28 was cancelled. This follows a well-established tradition of giving deference to sitting presidents. Once in office, a president can generally count on serving as many terms as he or she likes, assuming good behavior. Reflecting the belief that the president is "above politics," presidential candidates run for election as individuals--since 1952, political parties have played no role in nominating or endorsing candidates. President Grímsson has occasionally drawn criticism that he breaches the bounds of presidential etiquette by being too outspoken on sensitive political issues.  

Iceland's current President is Ólafur Ragnar Grímsson, a former political science professor who led the far-left People's Alliance in 1987-95 and served as Finance Minister in 1988-91. Although Grímsson won office with only a 41% plurality in 1996, he was not challenged for re-election in 2000. He was re-elected again on June 26, 2004. In 2008 Grímsson was re-elected by default, as no other candidate declared their intention to run against him. Since no opposition candidate was declared, the presidential election scheduled for June 28 was cancelled. This follows a well-established tradition of giving deference to sitting presidents. Once in office, a president can generally count on serving as many terms as he or she likes, assuming good behavior. Reflecting the belief that the president is "above politics," presidential candidates run for election as individuals—since 1952, political parties have played no role in nominating or endorsing candidates. President Grímsson has occasionally drawn criticism that he breaches the bounds of presidential etiquette by being too outspoken on sensitive political issues.  

===Foreign Relations===

===Foreign Relations===

*Net central government debt (2007): 4.9% of GDP.  

*Net central government debt (2007): 4.9% of GDP.  

*Natural resources: Marine products, hydroelectric and geothermal power.

*Natural resources: Marine products, hydroelectric and geothermal power.

*Agriculture: Products--potatoes, tomatoes, cucumbers, carrots, roses, livestock.

*Agriculture: Products—potatoes, tomatoes, cucumbers, carrots, roses, livestock.

*Industry: Types--aluminum smelting, fishing and fish processing technology, ferro-silicon alloy production, hydro and geothermal power, tourism, information technology.  

*Industry: Types—aluminum smelting, fishing and fish processing technology, ferro-silicon alloy production, hydro and geothermal power, tourism, information technology.  

*Trade: Exports of goods (2007)--$4.8 billion: marine products 41.8% industrial products 38.9%, agriculture 1.1%, and miscellaneous 18.2%. Partners--EEA 78.4% (Netherlands 21.3%, Germany 13.4%, U.K. 13.2%, Ireland 7.6%, Spain 4.6%, Norway 3.8%, Denmark 3.3%); U.S. 5.3% ($250 million); Japan 4.2%. Imports (2007)--$6.7 billion: industrial supplies 26.7%; capital goods, parts, accessories 21.5%; consumer goods 15.7%; transport equipment 20.5%; food and beverages 6.8%; fuels and lubricants 8%. Partners--EEA 64.6% (Germany 12.1%, Sweden 10%, Denmark 7.4%, Netherlands 5.6%, U.K. 5.4%, Norway 4.6%, Italy 3.4%); U.S. 13.5% ($208 million); China 5.1%; Japan 4.7%.  

*Trade: Exports of goods (2007)--$4.8 billion: marine products 41.8% industrial products 38.9%, agriculture 1.1%, and miscellaneous 18.2%. Partners—EEA 78.4% (Netherlands 21.3%, Germany 13.4%, U.K. 13.2%, Ireland 7.6%, Spain 4.6%, Norway 3.8%, Denmark 3.3%); U.S. 5.3% ($250 million); Japan 4.2%. Imports (2007)--$6.7 billion: industrial supplies 26.7%; capital goods, parts, accessories 21.5%; consumer goods 15.7%; transport equipment 20.5%; food and beverages 6.8%; fuels and lubricants 8%. Partners—EEA 64.6% (Germany 12.1%, Sweden 10%, Denmark 7.4%, Netherlands 5.6%, U.K. 5.4%, Norway 4.6%, Italy 3.4%); U.S. 13.5% ($208 million); China 5.1%; Japan 4.7%.  

Iceland's economy was historically prone to inflation due to periods of rapid growth and its dependence on a few key export sectors, such as fish, which could fluctuate significantly in quantity and price from one year to the next. For example, inflation exceeded 43% in 1974 and 59% in 1980, before falling to 15% in 1987, and then rising to 30% in 1988, which resulted in devaluations of the krona. In the 1990s and continuing until 2006, Iceland experienced several years of strong economic growth, thanks to economic reforms, deregulation, and low inflation, averaging around 4%. The economy suffered a setback in spring 2006 when credit rating agencies and other international financial firms released a number of reports raising questions about the activities and stability of Iceland's major banks and the state of the Icelandic economy. These reports were widely covered in the international financial press, causing a marked drop in the value of shares listed on the Icelandic stock exchange and of the Icelandic krona. The market recovered as reforms were made in the banking sector. The financial sector was hit hard by the global credit crisis beginning in 2007. Although Icelandic banks had limited sub-prime mortgage market exposure, they were affected by the general lack of available capital. In the first six months of 2008, the Icelandic krona was devalued by 30% and inflation rose to nearly 12%. Because of Iceland's high current account deficit, high inflation, and high private sector debt levels, the global financial community and the foreign media closely monitored the situation. In turn, the Icelandic Government has carefully followed foreign confidence in the Icelandic economy because access to foreign capital, which Icelandic business people have used aggressively in overseas investments, is extremely important. Wealthy Icelanders have heavily invested in the retail and real estate markets in Denmark and the U.K. and telecom, pharmaceutical, banking, and financial sectors in Eastern Europe. Their success, beginning in the late 1990s, created for the first time a "super-rich" elite in Icelandic society.  

Iceland's economy was historically prone to inflation due to periods of rapid growth and its dependence on a few key export sectors, such as fish, which could fluctuate significantly in quantity and price from one year to the next. For example, inflation exceeded 43% in 1974 and 59% in 1980, before falling to 15% in 1987, and then rising to 30% in 1988, which resulted in devaluations of the krona. In the 1990s and continuing until 2006, Iceland experienced several years of strong economic growth, thanks to economic reforms, deregulation, and low inflation, averaging around 4%. The economy suffered a setback in spring 2006 when credit rating agencies and other international financial firms released a number of reports raising questions about the activities and stability of Iceland's major banks and the state of the Icelandic economy. These reports were widely covered in the international financial press, causing a marked drop in the value of shares listed on the Icelandic stock exchange and of the Icelandic krona. The market recovered as reforms were made in the banking sector. The financial sector was hit hard by the global credit crisis beginning in 2007. Although Icelandic banks had limited sub-prime mortgage market exposure, they were affected by the general lack of available capital. In the first six months of 2008, the Icelandic krona was devalued by 30% and inflation rose to nearly 12%. Because of Iceland's high current account deficit, high inflation, and high private sector debt levels, the global financial community and the foreign media closely monitored the situation. In turn, the Icelandic Government has carefully followed foreign confidence in the Icelandic economy because access to foreign capital, which Icelandic business people have used aggressively in overseas investments, is extremely important. Wealthy Icelanders have heavily invested in the retail and real estate markets in Denmark and the U.K. and telecom, pharmaceutical, banking, and financial sectors in Eastern Europe. Their success, beginning in the late 1990s, created for the first time a "super-rich" elite in Icelandic society.  

Iceland has few proven mineral resources, but has abundant hydroelectric and geothermal energy resources. These clean energy sources provide for nearly 100% of electricity generation and home heating. Iceland's energy resources support power-intensive export industries, such as aluminum smelting. The Kárahnjúkar hydroelectric project is the largest single electrical station in the country, with capacity of 690 megawatts (mw). Other major hydroelectric stations include Búrfell (270 mw), Hrauneyjarfoss (210 mw), Sigalda (150 mw), and Blanda (150 mw). Iceland-based Nordural Aluminum is a wholly owned investment of Century Aluminum of Monterey, California. The plant employs more than 450 people and recently expanded its production capacity to 220,000 tons per year. A new smelter owned by Alcoa, another U.S.-owned aluminum company, began operations in June 2007 and will have a production capacity of 346,000 tons per year when fully operational. The Kárahnjúkar hydroelectric power plant, completed in early 2007, was built to provide power to the Alcoa smelter. Over $2 billion was invested to build the power plant and smelter, making the combined project the largest in Icelandic history.  

Iceland has few proven mineral resources, but has abundant hydroelectric and geothermal energy resources. These clean energy sources provide for nearly 100% of electricity generation and home heating. Iceland's energy resources support power-intensive export industries, such as aluminum smelting. The Kárahnjúkar hydroelectric project is the largest single electrical station in the country, with capacity of 690 megawatts (mw). Other major hydroelectric stations include Búrfell (270 mw), Hrauneyjarfoss (210 mw), Sigalda (150 mw), and Blanda (150 mw). Iceland-based Nordural Aluminum is a wholly owned investment of Century Aluminum of Monterey, California. The plant employs more than 450 people and recently expanded its production capacity to 220,000 tons per year. A new smelter owned by Alcoa, another U.S.-owned aluminum company, began operations in June 2007 and will have a production capacity of 346,000 tons per year when fully operational. The Kárahnjúkar hydroelectric power plant, completed in early 2007, was built to provide power to the Alcoa smelter. Over $2 billion was invested to build the power plant and smelter, making the combined project the largest in Icelandic history.  

Iceland has no railroads. Organized road building began about 1900 and has greatly expanded in the past decade. The current national road system connects most of the population centers along the coastal areas and consists of about 13,000 kilometers (8,125 mi.) of roads, of which about 4,800 kilometers (2,982 mi.) are paved. Regular air and sea service connects Reykjavík with the other main population centers.  

Iceland has no railroads. Organized road building began about 1900 and has greatly expanded in the past decade. The current national road system connects most of the population centers along the coastal areas and consists of about 13,000 kilometers (8,125 mi.) of roads, of which about 4,800 kilometers (2,982 mi.) are paved. Regular air and sea service connects Reykjavík with the other main population centers.  

==History==

==History==