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Jón Sigurðsson, leader of the Icelandic independence movement.
In 1814, following the Napoleonic Wars, Denmark-Norway was broken up into two separate kingdoms via the Treaty of Kiel. Iceland remained a Danish dependency. A new independence movement arose under the leadership of Jón Sigurðsson, inspired by the romantic and nationalist ideologies of mainland Europe.
In 1874, Denmark granted Iceland home rule, which was expanded in 1904. The Act of Union, an agreement with Denmark signed on 1 December 1918, recognised Iceland as a fully sovereign state under the Danish king. During the last quarter of the 19th century many Icelanders emigrated to North America, mainly Canada, in search of better living conditions. About 15,000 out of a total population of 70,000 left.
Iceland during World War II joined Denmark in asserting neutrality. After the German occupation of Denmark on 9 April 1940, Iceland's parliament declared that the Icelandic government should assume the Danish king's authority and take control over foreign affairs and other matters previously handled by Denmark on behalf of Iceland. A month later, British military forces occupied Iceland, violating Icelandic neutrality. In 1941, responsibility for the occupation was taken over by the United States Army. Allied occupation of Iceland lasted throughout the war.
On 31 December 1943, the Act of Union agreement expired after 25 years. Beginning on 20 May 1944, Icelanders voted in a four-day plebiscite on whether to terminate the union with Denmark and establish a republic. The vote was 97% in favour of ending the union and 95% in favour of the new republican constitution. Iceland formally became an independent republic on 17 June 1944, with Sveinn Björnsson as the first president.
In 1946, the Allied occupation force left Iceland, which formally became a member of NATO on 30 March 1949, amid domestic controversy and riots. On 5 May 1951, a defence agreement was signed with the United States. American troops returned to Iceland and remained throughout the Cold War, finally leaving in autumn of 2006.
The immediate post-war period was followed by substantial economic growth, driven by industrialisation of the fishing industry and Marshall aid and Keynesian government management of the economies of Europe, all of which promoted trade.[dubious – discuss] The 1970s were marked by the Cod Wars – several disputes with the United Kingdom over Iceland's extension of its fishing limits. The economy was greatly diversified and liberalized following Iceland's joining of the European Economic Area in 1992.
In 2003, Iceland decided to transform itself from a nation best known for its fishing industry into a global financial powerhouse. By 2008 the nation's currency was defunct and the national debt had soared to over eight times GDP.
Source: Wikipedia Encyclopedia