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Iceland

Yearbook 2000

Iceland. A well-known legal battle was fought during the year around the state system of compulsory catch quotas for those who are going to fish. A district court in January acquitted a fisherman who was charged with fishing without holding a quota. The Court explained that the quota system did not offer fair access to a public resource. The ruling was strongly criticized by Prime Minister Davíd Oddsson, who said that I's economy would be ruined if everyone were allowed to compete freely for the total annual catch. The fishing would then be over in a couple of months, he claimed. The state appealed against the judgment, and in April it was set aside by the Supreme Court. However, critical fishermen believed that the system makes a few people rich, and they demanded that the government change the law.

2000 Iceland

According to COUNTRYAAH, the catch of capelin (a Norwegian fish) in January became the largest in ten years. But the country's marine research institutes announced that the stock of cod, the most important export fish, had decreased, and a sharp reduction in annual catches was recommended from September. The news caused a fall in the price of the Icelandic krona, and the shares of the fishing companies fell on the stock exchange. Despite the interest rate hike, the krone continued to fall during the year, reaching a record low in November with the exchange rate of SEK 88. for a US dollar. After 5% economic growth for four consecutive years, growth for 2000 was projected to be only 3.5%. The trade deficit increased and inflation rose. In April, unemployment was 1.5%.

On the Icelandic National Day in June, southern Iceland was hit by an earthquake measuring 6.5 on the Richter scale and was the most powerful the island has experienced since 1912. Many houses were damaged, hot water lines burst and roads were destroyed, but no man was seriously injured.

Presidential elections would have been held during the year, but the election was canceled when no candidate challenged incumbent President Ólafur Ragnar Grímsson, who thereby automatically received a new tenure of four years. The three opposition parties, the Social Democrats, the Folk Alliance and the Women's List, who had cooperated in a left alliance in the 1999 elections, joined together during the year to form a new party, the Alliance.

The financial crisis

In the first years after the turn of the century, Iceland was increasingly referred to as an economic miracle. From 2002 to 2006, the Reykjavik Stock Exchange rose by 400 per cent and private consumption by 30 per cent, while house prices rose 50 per cent in one year. The financial industry appeared to be the driving force itself, and the financial institutions were behind the acquisition fright of everything from banks to retail chains and top football, mostly in the UK and Denmark, but the raids continued country after country - through huge borrowings. Foreign debt increased steeply, the expanding banking sector gradually incurred foreign claims between nine and ten times greater than the country's gross domestic product. The policy ratefollowed. The central bank warned against overheating the economy, but rejected all indications of a bubble about to burst. At the turn of the year 2007/2008 Iceland was named by the UN as one of the world's best countries to live in. A few months later, what was still a bubble had burst.

The international financial crisis hit Iceland far more severely than any other Nordic country. The acquisition raids brought a sudden stop for the three major banks Glitnir, Landsbanki and Kaupthing, which were in turn taken over by the Icelandic state. Crisis loans from the International Monetary Fund and from a number of countries in the neighborhood poured in, but little to the deficit, a weak krone, rising inflation and unemployment. Something like the memory of revolutionary conditions took place when a raging crowd in January 2009 besieged Alltinget and succeeded in forcing Prime Minister Geir Haarde's departure. Central Bank Governor David Oddson retired the same year.

A temporary, red-green crisis government of the Social Democrats and the Left Alliance, led by Johanna Sigurdardottir, ruled until the new election in April 2009. The government coalition gained renewed confidence in the election. In July, the Swedish parliament, with almost a majority - 33 out of the 63 mandates - decided to apply for membership in the EU. The Social Democrats were pushers for the yes side, with the economic crisis and the transition to the euro as the main argument. On the no side, the Independence Party and fishing interests played a key role. The European Commission decided to initiate membership negotiations, and on 17 June 2010 Iceland was granted candidate status at the EU summit. However, Iceland chose to withdraw the EU application in 2014.

Iceland's President from 2016 is Guðni Thorlacius Jóhannesson. In the 2017 election, none of the government alternatives got a pure majority, but the Independence Party was still the largest in the Allting, with 16 out of 62 seats, and Prime Minister Bjarni Benediktsson formed a coalition government.

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