Iceland. In the local elections in May, the ruling Progress Party suffered great losses. As a result of the election results, Halldór Ásgrímsson resigned as party leader and also as prime minister. He was succeeded as head of government by the then Foreign Minister Geir Haarde, leader of the larger coalition partner Independence Party. Haarde took over an economy that was overheated by high lending and a high level of investment as a result of an extensive expansion of aluminum production. Abroad, Icelandic banks and companies had invested in sums three times as large as their own country’s GDP. According to investment bank Merrill Lynch, the banks’ credit rating was greatly overestimated. The value of the Icelandic krona fell to the lowest level in several years. Iceland’s central bank warned of “unacceptable” inflation and raised the policy rate in August to 13.5%.
According to CountryAAH, major public holidays in Iceland include Independence Day (June 17) and New Year (January 1). The United States decided during the year that the US fighter planes and the helicopter rescue force should be withdrawn from Iceland. The decision was stated to have been made by President George W. Bush on the recommendation of Secretary of Defense Donald Rumsfeld. That meant the end of 65 years of US military presence on the island. The I government thought that trust between the two countries had been broken, but an American delegation came to Iceland to negotiate a new defense plan. In September, the withdrawal of US troops was completed, which meant that Iceland became one of the few countries in the world without permanent military defense. At the same time, about 700 Icelanders lost their jobs at the base.
In October, the government decided that commercial whaling would resume in Icelandic waters after a seventeen year ban. According to Iceland’s marine institute, the annual catch ratio of nine herring whales and 30 whale whales could not threaten the whale stock, which was estimated at over 25,000 whale whales and over 43,000 whale whales. But Iceland’s decision was criticized internationally. by the Swedish government, and Iceland’s tourism industry received cancellations in protest.
Iceland has been a member of EFTA since 1970. The EEA agreement was approved by the Allting in 1993, and Iceland became an associate member of the Western Union (WEU) in the same year. However, Iceland has not applied for EU membership. The EEA agreement means, among other things, that Iceland gained duty-free access to the EU for almost all its fishery products from 1997. On the other hand, the EU has obtained an annual catch quota of 3000 tonnes in Icelandic waters. Iceland joined the Schengen co-operation in 2001, together with the other Nordic countries.
In 2006, the United States brought home its force of 1,200 men from the Keflavik base, thus punishing 55 years of military presence in Iceland. The background was the changes in threat and weapons technology after the Cold War. But the decision came abruptly and without negotiating opportunities for Icelanders. Iceland has subsequently become stronger in the Nordic neighboring countries, and the European NATO countries in general, through agreements on air patrolling and regular military exercises, in which the United States now also participates.
In 2007, Iceland and Norway signed a bilateral cooperation agreement on, among other things, air surveillance and terrorism preparedness. Some of their own Icelandic military force is not a theme, but the new Defense Directorate that was created runs the radar systems from the US era and disseminates intelligence material within the alliance. Iceland has also contributed civilian personnel in Afghanistan – and now has defense on the agenda to a completely different degree than when everything was left to the Americans. In recent years, the Russian defense has increased its activity in the international airspace around Iceland’s borders.