Introduction: Settled by Norwegian and Celtic (Scottish and Irish) immigrants during the late 9th and 10th centuries A.D., Iceland boasts the world's oldest functioning legislative assembly, the Althing, established in 930. Independent for over 300 years, Iceland was subsequently ruled by Norway and Denmark. Fallout from the Askja volcano of 1875 devastated the Icelandic economy and caused widespread famine. Over the next quarter century, 20% of the island's population emigrated, mostly to Canada and the US. Limited home rule from Denmark was granted in 1874 and complete independence attained in 1944. The second half of the 20th century saw substantial...

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Economic Overview: As one of the smallest countries in the world, Iceland’s economy is particularly vulnerable to global economic fluctuations and has been severely affected by the global financial and economic crisis. The Icelandic economy experienced high levels of volatility in 2008 and suffered a collapse in the banking system. In October 2008, the government took control of the three big Icelandic commercial banks. On 24 October 2008, the International Monetary Fund (IMF) announced an IMF rescue package totalling US$2.1 billion for Iceland to address the effects of the global financial crisis. The IMF forecast in December 2008 that Iceland’s GDP could ...

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