Population: 300,000
Capital: Reykjavik

Political Rights Score: 1
Civil Liberties Score: 1
Status: Free


Prime Minister Halldor Asgrimsson of the Progressive Party stepped down after a poor performance by the ruling coalition in May local elections. He was succeeded by Geir Haarde of the Independence Party. Separately, in March, the United States had announced that it was ending its military presence on the island. Also in 2006, Iceland drew international criticism by reopening commercial whaling, which threatened endangered species.

In the year 930, the Norse chiefs of Iceland established the Althingi, which is now the oldest parliament in the world. After being dominated for centuries by Denmark and Norway, Iceland gained independence in 1944. It became a founding member of NATO in 1949, despite having no standing army of its own. Iceland entered into a defense agreement with the United States two years later, and declared itself a nuclear-free zone in 1985.

In general elections held in May 2003, David Oddsson's right-of-center Independence Party (IP) won 34 percent of the votes, gaining only two seats more than the left-leaning Social Democratic Alliance. The IP then formed a ruling coalition with the Progressive Party, acceding to the condition that Oddsson hand over the premiership to Progressive Party leader Halldor Asgrimsson the following year. Oddsson held the post from 1991 to 2004, making him the longest-serving prime minister in Europe.

In May 2004, the president, Olafur Ragnar Grimsson, refused to sign a law passed by Parliament that would have placed limits on media ownership. It was the first time an Icelandic president had vetoed a law in the republic's 60-year history. The veto stoked a constitutional controversy, as many felt that the president had departed from his office's traditionally apolitical role. The proposed law would have, in part, withheld broadcasting licenses from companies whose main businesses were not media related and from companies that owned nonmedia assets.

In 2005, an Icelandic court dismissed accounting fraud charges against Jon Asgeir Johannesson, the head of leading retail investment company Baugur. According to the firm, the charges were politically motivated. In 2006, the Supreme Court rejected a request by defendants in the case to throw out the remaining charges against them.

In another business scandal, allegations were made in early 2006 that S-Group, which had purchased a portion of former state bank Bunadarbanki during privatization, had lied about the status of German shareholders during the transaction. According to the Iceland Review, the owners of S-Group had close ties to the Progressive Party.

Asgrimsson stepped down as prime minister in June, following a poor performance by the ruling coalition in local elections. He was replaced by Geir Haarde, who had become the IP chairman after Oddsson retired from the post in October 2005.

Iceland in 2006 reopened explicit commercial whaling, allowing the hunting of species including the endangered Fin whale. The country had drawn international criticism since resuming whale hunts, ostensibly for scientific purposes, in 2003, after a moratorium dating to 1989. Iceland's tourism industry, which benefited from a whale-watching boom, had also opposed the resumption of any hunting.

While Iceland has strong historical, cultural, and economic ties with Europe, it has been hesitant to join the European Union (EU), primarily because of the EU's Common Fisheries Policy. Icelanders believe the policy would threaten their own fishing industry, upon which the economy is heavily dependent. However, the country has access to European markets as a member of the European Economic Area. In other multilateral activity, Iceland helped chair the Council of Baltic Sea States in 2006.

In March 2006, the United States informed the Icelandic government that it would withdraw its military presence from the island, but it remained committed to the country's defense under the 1951 treaty. In June, Iceland's justice minister proposed creating a National Security Department to deal with crime monitoring and terrorism prevention.

The World Economic Forum in September ranked the Icelandic economy 14th out of 117 in the world in terms of competitiveness; that was two positions higher than the country's 2005 ranking.

Political Rights and Civil Liberties

Iceland is an electoral democracy. The constitution, adopted in 1944, vests power in a president, whose functions are mainly ceremonial; a prime minister; a 63-seat unicameral legislature (the Althingi); and a judiciary. The president is directly elected for a four-year term. The legislature is also elected for four years, but it can be dissolved for early elections in certain circumstances. The prime minister, who performs most executive functions, is appointed by the president but is responsible to the legislature. Elections are free and fair.

Five political parties are represented in the Althingi. The largest is the Independence Party, whose former leader, David Oddsson, was Europe's longest-serving prime minister until he handed power to Progressive Party leader Halldor Asgrimsson in September 2004. Asgrimsson turned over the premiership to Geir Haarde following a poor local election performance in 2006. Although the Independence Party has dominated Icelandic politics since the country's independence, elections are competitive.

Corruption is generally not a problem for Iceland. It tied Finland and New Zealand as the country with the lowest level of perceived corruption in Transparency International's 2006 Corruption Perceptions Index, which covered 163 countries. However, former minister of industry and commerce Valgerdur Sverrisdóttir was accused that year of hiding details about the site on which the Kárahnjúkavirkjun dam was being built. The land is said to have active seismic faults. Protests against the dam project led to confrontations with police, prompting accusations of unwarranted harsh treatment and infringement on civil liberties.

The constitution guarantees freedom of speech and of the press. Iceland's wide range of print publications includes both independent and party-affiliated newspapers. An autonomous board of directors oversees the Icelandic National Broadcasting Service, which operates a number of transmitting and relay stations. There are both private and public television stations. However, media ownership is concentrated, with the Nordurljos (Northern Lights) Corporation controlling most of the private television networks and radio stations, and two out of the country's three national newspapers. Some reporters practice self-censorship to avoid publishing libelous material. A proposed law to restrict media ownership was the cause of one of the country's most severe political crises in 2004.

The constitution provides for the right to form religious associations and to practice any religion freely, though nearly 90 percent of Icelanders belong to the Evangelical Lutheran Church. The state financially supports and promotes the church through a special tax and religious instruction in schools. However, citizens who do not belong to a recognized religious organization may choose to give the tax to the University of Iceland and have their children exempted from religious instruction. In January 2006, the Icelandic Pagan Association sued several government ministries in order to receive funding proportional to its membership from money that is currently funneled into the state church, according to a U.S. State Department report. In November, the courts ruled against the Pagan Association, which is appealing the verdict to the Supreme Court. A new curriculum was implemented in 2006 by the Ministry of Education, taking a more multicultural approach to religious education.

Academic freedom is respected, and the education system is free of excessive political involvement.

The freedoms of association and peaceful assembly are upheld. Many domestic and international nongovernmental organizations (NGOs) operate freely in Iceland and enjoy extensive government cooperation. In late 2004, the government cut all direct funding to the Icelandic Human Rights Center, an organization started by NGOs to collect information on human rights issues in Iceland and abroad. According to the Council of Europe, authorities felt that state funding of independent human rights organizations was highly problematic. Iceland's labor movement is robust, with about 85 percent of all eligible workers belonging to unions. All unions have the right to strike.

The judiciary is independent. The law does not provide for trial by jury, but many trials and appeals use panels consisting of several judges. All judges serve for life. Under amendments passed in 1996, the constitution states that all people shall be treated equally before the law, regardless of sex, religion, opinion, ethnic origin, race, property, or other status. However, there is no constitutional provision specifically prohibiting racial discrimination in other contexts. In 2003, the UN Committee against Torture (CAT) issued a report that was critical of the country's legal provisions against torture. It found that the laws do not clearly define and prohibit the practice or ban the use of evidence obtained through torture. The Icelandic government disagreed with the report's findings. Prison conditions generally meet international standards.

In May 2004, the Act on Foreigners, which specifies the government's powers with regard to immigrants, including refugees and asylum seekers, was amended to close perceived loopholes. In addition, authorities can search houses without a prior court order in some cases of suspected immigration fraud. The new provisions led to criticism by human rights organizations, which claimed that they were discriminatory and violated privacy rights. In 2005, immigrant advocates expressed concerns about the government's handling of asylum requests, stating that the border patrol did not handle them properly. Also that year, the government announced plans to establish an Icelandic Immigration Council to administer immigration policy. The council began working in May 2006, gathering statistics and conducting outreach. Foreigners can vote in municipal elections if they have been residents of the country for at least five years, or three years for citizens of Scandinavian countries.

Women enjoy equal rights in Iceland, and more than 80 percent of women participate in the workforce. Of the 63 members of the Althingi, 21 are women, but there is no quota for the representation of women in Parliament. There are also 3 women in the 12-member cabinet. A pay gap exists between men and women in spite of laws designed to prevent disparities. In September, a plan was launched to reduce violence against women from 2006 to 2011 and to change public attitudes toward domestic violence. There has been some concern about women of immigrant origin, who may not have the opportunity to learn the Icelandic language and customs and may be unaware of their rights and status under the law. The European Commission against Racism and Intolerance has also criticized Iceland concerning immigrant women who become sex-trade workers in the country. The government participates in the Nordic-Baltic Action Group against Human Trafficking.

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