Iceland in 1998 was a small Nordic nation located in the North Atlantic Ocean. It had a population of approximately 280,000 people and was divided into 7 regions. The capital city of Reykjavik served as the nation’s political, economic, and cultural center. See dentistrymyth for Iceland in the year of 2015.
The economy of Iceland in 1998 was largely dependent on services and industry; particularly fishing, tourism, and aluminum smelting. Despite its economic growth since the fall of communism in 1989, unemployment levels were still relatively low with only around 2% of the population affected. Poverty levels were also low with less than 5% of people living below the poverty line. Education levels were high due to strong investment in resources; nearly all children had access to formal schooling.
The political situation in 1998 was stable despite occasional protests from opposition parties against government policies such as austerity measures or privatization initiatives. In response, the government implemented policies aimed at promoting economic development through increased investment in infrastructure projects as well as education reform initiatives such as free primary school education for all children. Despite these efforts however, much work still needed to be done in order for Iceland’s citizens to experience real economic prosperity and social progress.
Iceland. Fishing, which accounts for about three quarters of the country’s exports, had major problems at the beginning of the year. On the one hand, the season’s herring fishing gave only half of the allowable catch quota, and on the other, a conflict over fishing prices and wages led to about 5,000 fishermen going on strike for three weeks in February and March. The conflict was resolved through coercive legislation which, among other things, gave 13% pay raise. The country’s nurses also went on strike during the year and the result was up to 20% salary increase.
In the local elections in May, the left-dominated coalition retained power in Reykjavík, while the influence of conservatives continued to exist in the country.
According to Countryaah, the capital of Iceland is Reykjavik. Unemployment continued to decline for the second year in a row and was registered at 2.5% in July, close to halving compared to two years earlier.
In November, Iceland, Greenland and Norway signed an agreement on the boundaries of the sea area between Iceland, Greenland and Jan Mayen. At the same time, disagreement over the Norwegian fishing limit of 250 nautical miles continued around Svalbard.
Following lengthy negotiations in Brussels, it became clear in November that Iceland will receive full participation with ministerial influence in the EU’s Schengen border control agreement. However, the settlement must be approved by the Swedish Parliament and by all EU countries.
In February, the author and Nobel laureate in literature passed away Halldór Laxness, the country’s perhaps most well-known resident. He turned 95 years old.
- Abbreviationfinder: What does ISL stand for in geography? Here, this 3 letter acronym refers to the country of Iceland.
The injection of capital stopped the spread of the crisis, inside and outside Iceland, but the fundamental damage had already happened. 80% of the loans in the country were interest rate adjustment loans and 14% were in foreign currency. In both cases, private and public borrowers were put under intense pressure because interest rates exploded and the value of the Icelandic krone against foreign currencies was reduced to one third. One went bankrupt or got into deep financial trouble. At the same time, unemployment exploded. In October 2008 alone, it tripled and up to 1/5 of the population had to go down in salary. There were daily demonstrations against the government and the National Bank, which were responsible for the outbreak, extent and major consequences of the crisis.
After 14 weeks of constant demonstrations against the government, Prime Minister Geir Haarde resigned in January 2009. After 18 years on the government, the independence party had to abandon it because of the economic morass it had brought the country into. Two weeks later a coalition government consisting of the Social Democracy and the Left-Green took over with Social Democrat leader Jóhanna Sigurðardóttir as prime minister. She also became the country’s first female prime minister. The first step of the new government was to remove National Bank Governor Davíð Oddsson and his advisers. It happened 2 weeks later. In April, parliamentary elections were held, causing a stinging defeat for the Independence Party, which lost 1/3 of its votes. The center-left government under Sigurðardóttir’s leadership could continue.
In April 2009, the Icelandic State Prosecutor hired Norwegian-French investigator Eva Joly to investigate whether cases can be brought against bank executives, politicians and business owners for their role in the crisis. It was first and foremost about hedging the criminal transactions – not the actual deregulation of the banking system in 2001 that paved the way for the economic bubble and its collapse. Joly stated that the investigation could easily take 2-3 years, would start in Iceland but then spread to other countries.
In July, Parliament voted by a narrow majority to seek admission to the EU, thereby increasing its financial stability. It was before the economic collapse in Greece that brought EMU to its knees. Enlargement Commissioner Olli Rehn declared that Iceland was welcome.
In August, despite fierce public protests, Parliament passed the so-called Icesave law to repay Icesave’s half a million account holders in the United Kingdom and the Netherlands. It is about 5 billion. US $. The law causes Iceland to pay the UK 4% of its GDP in 2017-23 in British pounds and the Netherlands 2% of its GDP in the same period in Euro. Opponents pointed out that there was no reason for Icelanders to pay for the cracked criminal banks’ financial circus, or the British and Dutch speculators who had gone after the highest interest rates. The government argued that this was necessary as otherwise the UK and the Netherlands would block the IMF’s continued flow of capital to Iceland. The adoption of the law caused the government’s popularity to plummet.
GDP fell by 6.5% in 2009, which was a lot less than the 10% IMF had predicted at the beginning of the year. The first 5.5% decline was recorded in the first half of the year, so there was immediate prospect of stabilizing the otherwise chaotic situation.
In January 2013, the Social Democracy and the Red-Green announced that negotiations with the EU would be postponed after the parliamentary elections. The two bourgeois parties The Independence Party and the Progressive Party, in turn, agreed to put the negotiations on hold. The population was far more skeptical about the EU in 2013 than before, and the government was no longer in line with the population at this point.
The election to the Althing in April 2013 was a disaster for the Social Democracy, falling 16.9% to 12.9. At the same time, the smoke-green 11.2% went back to 10.9. In contrast, the Pirate Party came in with 5.1% of the vote. The Independence Party rose 3% to 26.7 and the Progress Party went 9.6% to 24.4%. After the election, the two major bourgeois parties formed a coalition government with the Progressive Party’s Sigmundur Davíð Gunnlaugsson as prime minister. The two parties that had driven the Icelandic economy down a few years earlier were thus back in power.