NATIONAL INTELLIGENCE SURVEY 68; ICELAND; COUNTRY PROFILE

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• Collection: NIS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP01-00707R000200110044-5
• Release Decision: RIF
• Original Classification: U
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• Sequence Number: 44
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CONFIDENTIAL
68 /GS /CP
Iceland
j June 1373
NATIONAL INTELLIGENCE SURVEY
CONFIDENTIAL
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NATIONAL INTELLIGENCE SURVEY PUBLICATIONS
The basic unit of the NIS is the General Survey, which is now
published in a bound -by- chapter format so that topics of greater per-
ishability can be updated on are individual basis. These chapters Country
Profile, The Society, Government and Politics, The Economy, Military Geog-
raphy, Transportation and Telecommunications, Armed Forces, Science, and
Intelligence and Security, provide the primary NIS coverage. Some chapters,
particularly Science and Intelligence and Security, that are not pertinent to
all countries, are produced selectively. For small countries requiring only
minimal NIS treatment, the General Survey coverage may be bound into
one volume.
Supplementing the General Survey is the NIS Basic Intelligence Fact
book, a ready reference publication that semiannually updates key sta-
tisi* data found in the Survey. An unclassified edition of the factboek
omits some details on the economy, the defense forces, and the intelligence
and security organizations.
Although detailed sections on many topics were part of the NIS
Program, production of these sections has been phased out. Those pre-
viously produced will continue to be available as long as the major
portion of the study is considered valid.
A quarterly listing of all active NIS units is published in the Inventory
of Available NIS Publications, which is also bound into the concurrent
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Initial dissemination, additional copies of NIS units, or separate
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The General Survey is prepared for the NIS by the Central Intelligence
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For NIS containing unclassified material, however, the
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GENERAL SURVEY CHAPTERS
COUNTRY PROFILE Integrated perspective of
the subject country Chronology Area brief
Summary reap
THE SOCIETY Social structure Population
Labor Health Living conditions Social
problems Religion Education Public infor-
mation Artistic expression
GOVERNMENT AND POLITICS Political evo-
lution of the state Governmental strength and
stability Structure and function Political dy-
namics National policies Threats to stability
The police Intelligence and security Coun-
tersubversion and counterinsurgency capabiiities
Defense establishment
THE ECONOMY Appraisal of the economy Its
structure� agriculture, fisheries, forestry, fuels and
power, metals and minerals, manufacturing and
construction Domestic trade Economic policy
and development International economic rela-
tions
TRANSPORTATION AND TELECOMMUNICA-
TIONS Appraisal of systems Strategic mobility
P.ailroads Highways Inland waterways Ports
F Merchant marine Civil air Airfields The
telecom system
MILITARY GEOGRAPHY Topography and cli-
mate Military geographic regions Strategic
areas Internal routes Approaches: sea, air
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icctAnO
Iceland: Island in Transition i
Lore, Land, and Folk Mind and Spirit:
Culture as a Priority The Prosperity of Fish-
ermen Family -size Politics External
Affairs: Yes and No Problems for the Fu-
ture
Chronology 12
Area Brief 14
Summary Map ....................follows 14
This Country Profile was prepared for the NIS by
the Central Intelligence Agency.. Research was sub-
stantially completed by February 1973.
CONFIMNTIAI.
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04
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I'ew Countries evidence as many contrasts its (foes
Iceland, It thrives in modernity and vet worships tradi-
tioil. It is basically a Sca ndinavian nation, but due to
its isolation from the European continent this country
is distinctively different. It rightly claims to be a foun-
tainhead of parliamentary self government, but it nas
spent most of its existence under Norwegian and
Danish rule. Prosperous in recent years by any stan-
dard, it nonetheless seems constantly to be skirting the
edge of disaster chiefly because of overdependence
on an unstable fishing industry. And, just now emerg-
ing as a player oil the world stage, it still harbors an
old- fashioned isolationism, tinged by a mild case of
xenophobia. (U,'OU)
This small island, sparsely peopled by the descen-
dants of the bloodthirsty Vikings, today is as law
abiding and pacific as any place on earth. it flaunts a
great Cultural heritage, which is protected almost to
the point of impairing its cultural future. The ideal of
rugger{ individualism is treasured; vet Iceland is essen-
tially all urbanized social welfare society dominated
by the necessity for group cooperation. Politicians
argue spiritedly for their principles and then seek corm
promise in all manner of governing coalitions. Govern-
ment ownership is extensive, private businesses
and cooperatives also thrive. Churches stand largely
empty as simultaneously a deep mysticism pervades
the land. Modernistic structures coexist with the few
remaining primitive hovels. (U; OU)
Even Iceland's physical milieu is a combination of
fire and ice, long dlay and nearly endless nights, foul
winters and balmy summers lush grazing land and
barren lava fields. Few standard crops will grow in the
sparse soil, while bananas mature in greenhouses
heated thermal springs. Decent roads are scarce,
but two sizable overseas airlines are operated. On the
human level, egalitarianism is almost universally prac-
ticed, but the talented few are also encouraged to ex-
cel. Tolerance in all matters is the guiding rule of con-
duct among the natives, but outsiders are generally
given a Cool welcome. Overall, a basic optimism
prevails amidst a mood of impending disaster. (U; OU)
With justification Iceland has been called "the
newest of the old nations and the oldest of the new
nations." I listorically, its national existence dates front
the ninth century, but onl\. since 194 -1 has it enjoyed]
full status as it modern independent stilt(-. In
geological terins it is one of the most mobile land
nlacsses on the face of the globe, continually being
altered by the forces of nature volc�anocs, glaciers,
and runtpu rivers, to cite only the most sp
tacular. No less remarkable are its hardy people. In a
short space of tine, delving difficult odds, tile\. have
built a modern society while clinging tenaciously to a
valuable heritage richly expressed in the widely read
"Sagas," the treasure of Iceland's national literatt.re.
Ji '0 L')
During the past 50 years Iceland has undergone a
transformation. In "the good old days" Icelanders
were proud but pitiable �Aw and large badly housed,
poorly nourished, disease ridden, impoverished, and
foreign dominated. Despite limited resources, each of
these afflictions has been lifted and nog\. the citizenry
partakes of the Scandinavian miracle" with ali its
pleasures and promises.:klso lifted is the veil of isola-
tion Which allowed Icelanders to be content unto
themselves. World War 11 and the advent of the air
age made Iceland. until then a curious and largely
forgotten speck of land, into it strategic outpost in the
North Mlantic. (U.'OLT
Many icelanders have viewed these developments
favorably and are inclined to become more world
Minded, iic essence to see their nation reach out to
others for commercial, political, and cultural ties and
to adopt others* Ways when found superior. For some,
ho\\.e\.e change has been viewed as a very mixed
blessing. WWrapped up in their own manners and mores
and irtbued with it powerful nationalistic outlook,
they would disallow "corrupting alien influences" ail(]
coutir)ae to li in their own little world. It is this im-
pulse that over the years has impelled Iceland to fight
"cod wars" with Britain and thre the ouste of the
Iceland Defense Forces manned by the United States
under the aegis of the North Atlantic Treaty Organiza-
tion (N :1'I'O). In these issues, and i t others, the
problem is to chart it course th provides for the
nation's advancement without diluting and ultimately
destroying the tightly knit, vital entity that is Iceland].
(U,'OU
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LVV7IVVI IV. VIl1'
TI c tilor\ of 1co III 11(I is u Ili( luc in that it is the (1111\
country of I�:urot)c with a dofinitcl\ kIIm a I)c47,i1111iIIL;
1ccl:ui(I nc\cr had a primiti\v race, and thin t crc
r( not sit l)jugation, of ahorit,inc In addition, lhcrc
,�n� no reigns of 111 lI ruler,. glorious niilitar\ cs-
calr,r(Ic11, conquest� of eakcr ncighborN. or lorcc(I
tranocr� of lan(I I'hc lirst rccordt-d sighting of tl:c
islatlll c(IInc front the talc, o f Iin� AIristiaiI c\l)lorcrs.
lcco'(ling to sums� accounts. the aIwicits caIled tilt
M act l'ltiIIII Thule i the lit( Is n�ni( Itc I)Iacc in the
orI(I'' It Ncas more than a niillcniiiin. hrn\c\cr.
Ix�forc Irish nionks..cckiiig cmitcilwlatkv "olitu(Ic. cti-
tahlishc(I the lirst tenuous ,t tdcntl�nt ou the southeast
c( )i >t
Things IIrr. HiI Ill plar( of /c,Iaful.. I'urIm /lit lit
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The fit;t Norse colonists arrived in 874, causing the
less bold Irish to flee before them. These Vikings were
princely refugees from the tyranny of King Harald
Fairhair -,who had they: recently succeeded in unifying
Norway. Finding a land much like the one of their
origin, they prospered, multiplied, and in 930 es-
tablished a parliament (today called "the world's
oldest surviving legislature and the first republic
north of the Alps. Peaceful toil was punctuated by
tribal quarrels, which were not without serendipitous
results. Icelandic chieftain Erik the Red, fleeing his
enemies, discovered Greenland and founded a settle-
ment there. His son Lief, also a refugee, discovered
"Vinlanu," now established as the northeastern sector
of North America.
By the beginning of the 13th century rival clans
were locked in a general civil war, which ended only in
1262 when the Norwegian King intervened, gained
dominion, and terminated the first Icelandic republic.
In 1380 both Iceland and Norvav were absorbed into
a Danish union which remained for nearly six cen-
turies. During this period Iceland was sorely
tried �and not just by the representatives of a foreign
monarch. The Black Death, the struggles of the Refor-
mation, the depradations of pirates, and smallpox,
leprosy, and starvation succeeded one another.
Devastating volcanic eruptions periodically buried
farms and villages. The population declined drastical-
ly, and for a time it appeared that Iceland might have
to be abandoned as uninhabitable.
Daring the 19th century, however, nature relented
and popular apathy abated. Icelandic nationalism
reemerged� principally tinder the direction of Jon
Sigurdsson, the George Washington of Icelandic in-
dependence. After years of struggle, the stubborn
Icelanders eroded Danish determination. Partial home
rule was granted in 1903, and nearly full sovereignty
(excepting foreign relations) under the Danish King
came in 1918. When Denmark was taken over by Ger-
many in 1940, British and then American forces in turn
occupied Iceland to deny it to the Axis powers. In June
1944, after 4 years of de fact o self- government, Iceland
severed its remaining ties with Denmark and, declar-
ing itself a republic once more, regained its status of
ages past.
Icelandic history has been played out on a
remarkable stage. Located immediately south of the
Arctic Circle, this lonely nation lice on the margin of
the habitable world, 160 nautical iniles from
Greenland and 500 nautical miles from Scotland.
Mighty glaciers, numerous volcanoes, active geysers,
rushing streams, magnificent waterfalls, broad lava
fields, thermal pools, small lakes, and a girdle of
lashing seas supply an awesome beauty �and leave
three fourths of the island uninhabitable. The in-
hospitality of the land was most vividly demonstrated
in 1783 -84 when the Laki crater spewed forth the
greatest lava flow ever recorded. A thick blanket of
dust and debris was spread over vast areas of the
island, destroying crops and livestock and resulting in
a devastating famine. Again in 1563, worldwide atten-
tion focused on Iceland when a spectacular undersea
eruption created the island of Surtsey off the south
coast. And, a sudden eruption of, the long dormant
Helgafjell volcano in January 1973 forced the evacua-
tion of Heimaey island, an important fishing center.
The saving grace for Iceland lies in its climate,
which belies the name given this otherwise alien place
by a disgruntled Viking adventurer. Normally,
favorable winds and ,.varm ocean. urrents supply
temperatures and precipitation patterns akin to those
of southern Canada or the northernmost United States.
Generally cool, clear, and invigorating, the weather
may suddenly deteriorate, however, and bring on
almost unbearable conditions such as the bluster
deluges that have earned Iceland the title of "land of
the horizontal rain."
In the Icelandic realm of flora and fauna, the forces
of man nid nature have created an :austere and lonely
present Extensive birch forests that existed at the
time of settlement were destroyed by ruthless cutting,
and strong winds removed the precious soil from vast
areas. Only in recent decades have afforestation and
grass seeding programs begun to reverse the trends that
gave the treeless vistas a desolate and almost deathlike
appearance. Aside from a few foxes, reindeer, rodents,
and occasional polar bears (who visit by means of drift
ice) this northern wilderness is also largely bereft of
wild lard animals. The bird population, by contrast, is
immense, and the banks around the coasts are among
the richest and most heavily exploited fishing grounds
in the world.
Oval- shaped, Iceland is some 300 miles long and
200 miles wide, about the size of Kentucky. With a
total of just 209,000 people, it has a population density
of only five per square mile, lowest in the Western
Hemisphere, and easily the lowest in Europe.
Two thirds of the inhabitants have congregated in the
southwestern corner of the island in the vicinity of
3
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Reykjavik,* the remainder being found chiefly in
coastal fishing villages and scattered farms. A
minimetropolis of some 80,000, Reykjavik is dis-
tinguished as the world's most northerly capital and as
Iceland's commercial, cultural, transportation, and in-
dustrial hub. Ingeniously heated by piped water from
nearby hot springs, it is virtually smoke and smog free,
but in most other respects is generally considered, even
by many natives, to be a place of limited charm.
Icelanders have taken pains to stay in contact with
each other and with the outside world. Telephones are
available in almost every household, and cars are in
remarkable supply despite a 90% import tariff and
roads that are narrow, gravelly, pitted, and frequently
impassable. Lacking railroads or navigable rivers, the
nation takes up the slack with an extensive short -hop
air service and a coastal shipping net. Yesteryear's
Vikings are today's champion birdmen; they do more
flying per capita than any other people of Europe, and
also operate the famous low -fare airline, Icelandic.
Handsome and yet aloof, Icelanders are a people in
tune with their surroundings. By reason of their
geographic isolation they display a degree of ethnic
homogeneity rare even for Scandinavians. Racially,
they are somewhat less than purely Nordic because of
the introduction of British wives and Irish slaves in the
early centuries. In appearance, they are a blend of two
models: the tall, fair, blue -eyed Norse and the dark,
stocky Celts. Further mixing has been diserluraged,
however. Few immigrants are accepted; foreign
workers are not welcome, and even tourism is not
heavily exploited. Moreover, in the postwar decades,
Reykjavik frowned on the stationing of black
American servicemen on the island.
Icelandic society, inbred as it is, takes on the aspect
of a large, proud, energetic, democratically run family.
Practically everyone is related to everyone else, and
practically everyone rates himself the equal of
everyone else. There is little need "to keep up with the
Jonssons," for wages are so regulated as to leave only a
small gap between the best and poorest paid. A
women's liberation movement would appear to be un-
necessary, for women have long been accepted on a
par with men. Many do not choose to compete in
politics, business, and the professions, but their eman-
cipation is evident in the companionable relationship
they enjoy with men both in and out of the marriage
For diacritics on place names see the list of names on the apron of
the Summary \/lap and the map itself.
situation. Attitudes toward sex are of the liberal Scan-
dinavian variety �only more so. One fourth or more of
all births in a given year may occur out of wedlock; yet
no stigma attaches to the child or the parents. In any
case, marriage is frequently a casual matter easily
made and easily broken, and child parent relations are
"unstructured," even by modern American standards.
Yet, the lack of strict codes of conduct seems to make
little difference. In this circumscribed, even intimate
Icelandic society, everyone feels that he belongs, and it
is this intangible that makes Iceland an eminently
rational country.
Like their Norwegian "cousins," Icelanders equate
their success as organizers of "a good society" with the
thought that they are essentially an enlightened,
hard- working, virtuous people. They still tend to see
themselves as frontiersmen facing the challenge of a
difficult land �and, for the fisherman and farmer, life
can be incredibly hard. They have turned inward to
themselves for s+rength, and in the process built a
closed society. They view foreigners �there are no
neighboring nations �with reserve and even suspicion.
Though capable of exuding charm in the presence of
outsiders, they prefer to conserve their warmth for their
"own kind."
Icelanders definitely feel that they are their
brothers' keepers. Even in ancient days a man's
relatives, neighbors, or community were held responsi-
ble for him if he fell on hard times. Starting late in
comparison with other northern European
governments, Reykjavik has since the 1930's taken on
more of this responsibility, and now there is virtually
no hardship situation that is not covered by an ap-
propriate program. The price is high �an estimated
one -tenth of the national income �but, in this land of
harshness, few protest the cost.
Thanks to government efforts, Iceland has been
made over in this century from one of the sickest into
one of the healthiest of nations. Two old scourges,
leprosy and tuberculosis, are now virtually extinct. But
in this cold and lonely climate the occurrence of
respiratory ailments and alcoholism is high; the suicide
rate, however, is not. Ever the active one, the typical
native fosters his own mental and physical well -being
with a rigorous blend of chess and swimming.
Icelanders also eat well, with fish, not surprisingly, ser-
ving as the dietary mainstay and with such other Vik-
ing specialties" as boiled sheep's head, raw whale
blubber, ptarmigan steak, prune soup, and skyr (sour
curdled milk) also available.
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During the long vigil against the forces of nature,
the Icelander seems to have concluded that mail exalts
mankind through his powers of reason and expression.
Moreover, the Icelander throughout his history has
made literature and art an intimate part of his daily
life �not something to he set apart fo: special recogni-
tion or revered from afar. Thus it is that the civilizing
effects of culture are not layered on Icelandic society
but rather are blended in as an integral part of it.
Prosperity in recent years has stimulated the propaga-
tion of the arts, and the introspective character of the
People continues to build a strong base of receptivity.
Per capita, a greater number of books are written,
printed, bought, and read here than anywhere else in
the world. Original paintings cover the walls of urban
dwellings and farmhouses.
The Icelander's special pride is his language �one
that, existing in isolation, has defied evolution to the
point where ocher Scandinavians find it sorething of a
mystery. Local scholars, in continuing defense of its
purity, prefer to invent a new word from old roots
rather than accept a foreign word. When critics argue
that enforced sterility of the word breeds sterility of the
mind, Icelanders respond by citing their great ongoing
literary heritage.
When mainland Europe was stiil in the Dark Ages,
Iceland was producing works which have generally
been rated as the first masterpieces of Western prose
since the fall of Greece and Rome. This reputation,
remarkable for so small a country, rests chiefly on the
immortal Sagas, a series of straightforward, red- blood-
ed, fast moving tales of battles, gods, and heroes,
written during the 12th to 14th centuries. Haunted by
the literary brilliance of their ancestors, Icelanders con-
tinue to become men of letters in exceptional numbers.
Probably the best known of the modern writers is
Halidor Laxness, a Nobel prize winner for literature,
whose sharp portrayals of Icelandic folk and their cir-
cumstances frequently reflect the leftist political
leanings so common to the nation's intellectuals.
As in other countries, so in Iceland has the old,
serious cultural tradition been sternly challenged by
modern "pop" culture. In a land where the classics
have become a part of the lifeblood of the nation the
battle has taken oil strong nationalistic overtones �as
is evident in Iceland's "TV war." For years, the U.S.
armed forces station at Keflavik has been a hone of
contention between those who enjoy American -style
programing and those who regard it as a corrupting in-
fluence and would bar its transmissions in the local
market. Icelandic television, with its more highbrow
offerings, went into operation only in 1966, and many
natives continue to risk "Americanization" by
watching Keflavik.
In the realm of education 1cciand appears to have
made a better adjustment between the old and the
new. 'Traditional subjects, notably language and
literature, share time with practical training, including
swimming. School is universal; illiteracy is virtually
unknown, and advancement comes chiefly on the
basis of ability. Not surprising, too, is the fact that
educational and cultural affairs receive a slice of the
budgetary pie second only to social welfare.
By and large, Icelanders lavish far more time on
matters of the mind than those of the spirit. In the year
1000 Iceland adopted Christianity by parliamentary
decree and in the 16th century converted to
Lutheranism in a fairly bloodless mini- Reformation.
To this day, however, organized religion has played
only a secondary role in the lives of Icelanders. The
Evangelical Lutheran state church is largely an
organizational shell manned by learned but uninspired
men, while the people look elsewhere for spiritual
strength. To some small extent the old pagan gods are
still favorably regarded, at least nominally, and the
spectacular natural phenomena of Iceland� geysers,
volcanoes, and the like �have helped promote belief
in a rod of nature and the power of mystical ex-
perience.
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t'ntiI mccnt decades the main concern of Icelanders
was simply national survival. I or centuries leclau(l
was little more than it serf of dominant Norway and
I)enntark. During the 17th, 15th, and first half of the
19th centuries, in fact, it strictly iittpose I I )all ish trade
monopoly virtually beggared the island. Eveil at the
turn of this c (,nhtry the country was still it poor and
struggling economic backwater, almost wholly un-
touched by the industrial revolution. Finally, World
War II ushered in it mirtcu;ous change. England,
battered and partially isolated, came to rely on a
steady supple I Icelandic fish. ;1t the same time, the
Icelanders pro.itted huger' from the coming of the
American defense forces. 1'rosperity was sudd (,illy at
7 A_
N
hand, and w itII song slit ht variations it has carried
through t1w postwar \ears.
Now an entirely different cenicern� severe in-
flation �arose to klonfront Iceland. Its basic unit of
c.trrencv, tit( krona, has been devalued it half dozen
t'.enes since� 19.46. While will (;N l grew at an average
annual rate of front 1961 to 1971, inflation has
averaged Il', annually. The government has
rclwatedly attempted by sundry means to innplenient
an (,ffectiye stabilization program, but success has only
been fleeting. The prohlcm has been a firth link
b(,hveen wages autd prices which has driven both up in
a se(,ntingly ney(,r- ending spiral. \lid post\yar
governnuvnts have not found it politically fcasiblc to
deny wage raises following rises in tit(, price index.
More basis. to Iceland's situation is the fact that. in
contrast to its spiritual self sufficiency, it is one of the
nrtost materially dependlent countries on the face of the
earth. It must import everything from heavy
machinery to toilet paper.:\nd to pay its way it must
live up to tit( old slogan of "export or die.' Becausc of
its small size Iceland has little p ()wcr to influence the
world market, and thus it is almost as much at the mer-
cv of broads economic forces its it is of its natural
habitat. Iceland's only real resources are adjacent
fishing grounds, thermal springs, and hydroelectric
power. Oil the debit side are its geographic isolation,
short growing season, and ragged, sparsely populated,
and lightly cultivated terrain. Under these cir-
cumstances its productive capabilities and, hence, its
export abilities are sev(,rely circumscribed.
Iceland has found economic salvation in fish. One
in five natives \ti. -trks in the fishing industry, whose
products accounted) for over 50"r of local exports in
1971 �still down front the more than 90"(' of recent
years. Sadly for the Icelanders, the fish have not h(,en
contpictely cooperative. The migratory habits of her-
ring make their catch unpredictable, and the valuable
cod appawntly have not multiplied in sufficient
numbers to fill the nets of the ever more active
fishermen of several nations. Ilevkjavik's drastic
remedy, applied on the grounds that Iceland must fish
to live, has been to increase progressively the swaths of
ocean that it claims as an CXL�lusivc fishing ground. In-
creases in its offshore limits first to 4 miles and then to
12 produced it prolonged cod war' with the United
Kingdom in the 1950's, harassments at sea, collisions,
boardings, and confiscations �and in late 1972 the
two nations again beranie embroiled when Iceland ex-
tended its limit to 50 nniles. This action, taken in con-
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junction with almounccd intentions to claim a 100
mile pollution -frcc zone, caused concern in
Washington that the principle of freedon, of the seas
might stand in jeopardy.
With fishing ill the doldrums, Iceland has sought to
holster its econonly through diversification. Some
attempt lilts been rluulc to reinvigorate the agricultural
sector, which until the tarn of the century was the
mainstay of the economy and still employs one- eighth
of the labor force on some 5,000 farms. Dairying has
been encouraged to the point where it has surpassed
even sheep raising, though the wool- bearing beasts still
outnumber the human population by it ratio of four to
Iceland is one of several countries that lays claim to
haying .,,vented parliamentary democracy. Whether
its claim is more valid than the others is, of course,
moot. What is important is that Icelanders have
zealously practiced forms of parliamentary democracy
both in ancient and modern times.
In so small a country it is quite natural that it strong
centralized national regime should exist. Nitiltiple par-
ties allow for the representation of a broad range of in-
terests and also require the formation of coalition
governments that serve to check rash actions by
overweening authorities. Furthermore, respect for
public opinion and it disrespect for the formal
machinery of government are typical of Icelanders.
Before a government moves, it is wise to assess the
nlood of the country; otherwise, the small brit alert
electorate may retaliate at the polls.
\s clots the United States, Iceland goes to the polls
every -I years to elect a chief executive. The !crlandic
President, hove :r, is the republican equivalent of the
Scall(I constitutional monarch 111 his
powerlessness. Only in times of crisis is he likely to
muster his prostige in order to influence the course of
the nation. A prime minister and a handfu's of iesser
ministers, normally six, wield executive power at the
pleasure of parliament. The overall size and repute of
the administration nlay be appreciated by the fact that
until recently it was housed in a relatively small struc-
ture built in 1764 as a prison.
Tile rnllin jewel in the governing watchworks is
parliament. The :llthing (all speaking assembly) ill
itially met in 930 at Thingvellir (assembly plain), now
one. Crap production remains restricted chiefly to
animal fodder, it few potatoes and turnips, and those
fruits and yegetahles that can be grown, at exorbitant
cost, in gcothermically heated greenhouses. Elsewhere,
a government- sponsored factory expansion program
has activated as alunlinunl smelter and plants produc-
ing woolen fashions and diatomite. A broader i!.-
dustrial buildup, however, has been inhibited by a
paucity of labor, a shortage of imestnlent capital, a
small domestic market, and stiff coinpetition from
foreign producers. 'Thus, Icelandic industry remains
relatively insignificant, designed Principally to meet
local needs.
c ,,osidered hallowed groctnd.:1 co,i'clayc of local chief-
tains gathered largely to settle their disputes, this first
parliament bore only a passing resemblance to the
present-day legisiature. Then too, with Jiv coming of
the Norwegian and Danish suzerains, the: thinl laps-
ed into ineffectuality, and between 1500 and 1543 ac-
tually ceased to exist. Nonetheless, modern Icelanders
regard their :11thin" as a continuation of the original.
all(] claim for it the title of "granclnuother of
parliament. Today's parliament resembles that of
Norway in that it meets as a single chamber to consider
prime matters, such as the budget. N!t otherwise it
operates birunerally to provide the "double hurdle"
effect of the U.S Congress. In a unique marriage of
politics and art, the last sitting of each session at
Narlianlcnt House -an unprepossessing building ill
Danish baroque style �is conducted entirely in verse.
Justice, Scandinavian- style, is administered by
courts whose integrity is legally guaranteed against
assault by the executive or legislature. Capital punish-
ment does not exist, and even life imprisonment is
almost unheard of in this land of the lacy- abiding.
Convicts, the fey that there arc, receive lenient treat-
ment with a view to their rehabilitation.
Political parties in Iceland arc based primarily on
econonlic interest, to a lesser extent on ideology. 'Tile
electoral process is far from a tank one, however.
Campaigns take on the characteristics of a family
fight intense, bitter, and highly personal. Since the
vying of a fey votes can influence the number of scats
it party gets through the quasi proportional allocation
system, candidates go all out in open public debate,
[7
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the common medium of the contest. Then, too, the
nation's five daily newspapers, all party aligned, carry
on partisan warfare the year- round.
Iceland has what might be termed a four and
one -half party system, comprised of two principal
middle -road parties and a spiintered left. Icelandic
governments in recent decades have normally been led
either by the Independence Party, the representative of
commercial, fishing, and professional interests, or by
the Progressive Party, primarily the voice of the
farmers and cooperatives. The third- strongest political
analgam is the People's Alliance, a Communist front
grouping which has garnered sufficient acceptability,
0
particularly with labor, to join in governing coalitions
under each major party. A Social Democratic Party,
weakened by an ineffectual leadership and ideology,
rounds out the political establishment. The "half par
tv" occurs in the person of Hannibal Valdimarsson,
who once enjoyed leadership positions in the Social
Democratic Party and People's Alliance and as of the
early 1970's held an enviable balance of power posi-
tion in his self- created Organization of Liberals and
Leftists. The nation'F most colorful political personal
itv, Valdimarsson demonstrates by his success at the
polls tlir importance of individual appeal in the
Icelandic system.
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The hardest question that Icelandic governments
have had to face is whether or not to be a part of this
world. To the extent that Icelanders have had a choice
they have agreed, albeit somewhat grudgingly, that
they must play a role in the international arena, and
yet they have not overcome the tendency to retreat
into isolation. This ambivalence is constantly reflected
in the nation's foreign and defense policies.
For centuries Iceland managed to exist in a state of
unarmed neutrality, divorced from the diplomatic in-
trigue and periodic wars of the great pow ers. This
idyllic life ended in 19.10 when Iceland's position as a
forward military post, vital transportation link, and
important weather station thrust it into World War II.
in short order, Iceland found itself, in comparison to
its population, with the largest occupation
force principally American �of any country in the
world. Succumbing to the realities of the cold war,
Iceland joined NATO as a charter member in 1949
and in May 1951 signed an agreement with
NVashington providing for the stationing of U.S. forces
(the Iceland Defense Forces) under NATO auspices
at Keflavik,
From the start, nationalist- leftist political elements
saw red over the base issue. In 1956, a center -left
government moved to force the withdrawal of U.S.
troops, only to desist after the Soviet Union's ruthless
suppression of the Hungarian revolt and a U.S.
promise of a greater infusion of funds into Iceland. A
like minded regime announced on taking office in July
1971 that it would aim toward the final evacuation of
the Defense Forces; it too showed subsequently a
willingness to compromise. Caught between self in-
duced logical extremes �that U.S. forces on the one
hand protect and on the other jeopardize Icelandic in-
dependence� Reykjavik seemed destined to continue
along Its Chosen COCrsc of artful vacillation.
Icelandic parochialism aside, the nation's military
security in reality rests with the Defense Forces since
the islanders have never opted to raise an army of their
own �not even a comic opera style army that some
small nations affect. The uniformed national police,
about 250 strong, are available in the event of internal
unrest. Normally lightly armed �no pistols, only
rubber truncheons �they could be supplied with
heavier weapons on short notice. Otherwise, the closest
facsimile of a military unit is the Icelandic Coast
Guard. Its main function is to enforce fishing limits,
but presumably its 120 -man staff and five lightly arm-
ed patrol boats would be enlisted in a defense
emergency. In the public mind, however, there is tittle
expectation of such an emergency; meanwhile, the
government finds bliss in the absence of a nilitary
budget.
Iceland has a small but well- qualified professional
diplomatic establishment. About a dozen am-
bassadors, most with multiple responsibilities and ac-
creditatious, represent Iceland to the world. Aside from
such topics as Law of the Sea, Iceland nau, .ally has a
limited direct interest in most world matters, bait,
generally along with the other Nordic countries, plays
the role of a responible citizen in the international
community. Icelandic representatives on the whole
spend a considerable amount of their time and effort
in promoting expanded trade.
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U.S. Base at Keflavik

i
One truth about Iceland is self- evident: the national
heritage is ti( 4 victory over almost impossible odds.
The conqu. is effected by Norsemen accustomed
to surviving by their wits. Yet even for them what has
been accotn lisped represents almost a miracle.
Icelanders have been subjected to a merciless terrain, a
forbidding climate., periodic famine, civil strife, the
ravages of epidemics, foreign domination, and a
debased economy �and they have endured, though at
times just barely. Now that they have proven
themselves, the question remaining is whether they
can survive success. The character of the nation was
forged in adversity, and continuing trials have kept the
Icelanders alert to erosive influences. TranquillitN and
prosperity could foster an indifference in attitude and
slackness in action destructive to Iceland as n di:,tinc-
tive entity.
Some observers have already detected a decline in
the Icelander's individual character and in the nation's
collective ability to meet its needs. Sudden wartime
prosperity helped spark a revolution of rising expec-
tations, according to these viewers, and now the nation
is afflicted with "galloping materialism," at severe cost
to its spiritual health. To what extent the government
can continue to promote the public welfare is seen as
the crucial issue. Successive governments have wrestled
with the same problems: controlling inflation, im-
proving wages and working condit %ons, developing
electrical power, and advancing ind _tstry, agriculture,
and fishing. And successive governments have burned
themselves out in the process, or so the theory goes.
Over the immediate term, it is also possible to paint
Iceland', prospects in somewhat brighter hues. Despite
the nation's limited resources, there is a great deal
10
more that Icelandic governments can do. The country
has a great hydroelectric power potential. Labor is in-
dustrious, and the people are intelligent and dextrous.
Nourished by foreign capital and expertise, Iceland is
capable of making strides in the realm of skilled in-
dustrv. Even in the troubled fishing sector, there is talk
of making fish farming commercially viable. And
however visionary it project, the odds are that the
determined natives have the will to translate it into
reality.
A longer range issue for Iceland lies in population
growth. The island birth rate is one of the highest in
Western Europe, and the death rate is one of the
lowest in the world, yielding it rate of increase higher
than that of most other prosperous Western nations.
Projections from recent trends have placed the popula-
tion as high as the half million mark during the n;xt
century. Long underpopulated and not yet afflicted
with the ills of urbanization, the Iceland of today
nonetheless must begin to consider how many people
it can support.
It must consider, too, how much and at what ex-
pense it wishes to be of this world. Icelanders are sub-
ject to cultural change just as other peoples. As the out-
side world crowds in, they risk losing their identity,
and hence their ability to be Icelanders. Yet, the na-
tion has found no answer to its defense problem other
than through collective security via NATO, and it has
predicated its economic well -being on a thriving exter-
nal trade. Given these constants, Iceland seems fated
to emerge even further from its one -time shuttered ex-
istence. But, to th degree that the price is to be t}v, loss
of a portion of the Icelandic soul, the process Is likely
to be a painful one.
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A. %r %r %F I %p %oll I v.
I I �lw
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yN

rvvvi vva I W.
Chronology (usuu)
874
First settlers arrive from Norway.
930
The alth;ng is established as a national parliament for mi
Icelandic federation of self- governing "republics."
1262
Norwegian rule is accepted by treaty.
1380
Iceland, together with Norway, comes under Danish rule.
1800
Althing is abolished by royal decree; supreme court of law
takes its place.
1814
Norway separates from Denmark, but Iceland remains under
Danish rule.
1843
Althing is restored in Reykjavik but is vested with only
advisory powers, and electorate is limited to a few privileged
property owners.
1874
A Constitution is granted by Denmark, embodying it bill of
civil rights and remodeling the Althing into a legislative
assembly.
1903
A revised Constitution provides for partial home rule, in-
cluding a single cabinet minister in Iceland, appointed by
the King of Denmark and responsible to the Althing.
1915
A second revision of the Constitution provides for complete
parliamentary democracy but leaves defense and foreign
affairs under Danish control.
1918
December
Act o` Union, ratified by Iceland and Denmark, makes Ice-
land un independent kingdom joined to Denmark under a
common monarch, but makes Iceland's military defense a
Danish responsibility and leaves foreign affairs under Danish
administration.
1940
April
Denmark is occupied by Germany, rendering Denmark unable
to fulfill its defense commitment to Iceland.
May
British troops occupy Iceland.
1941
July
U.S.- Icelandic Defense Agreement provides for stationing
U.S. forces on the island during World War 11.
1944
June
Iceland abrogates the Act of union, severing its list ties with
Denmark, declares itself a republic, and adopts a new
Constitution.
1946
September
Keflavik Agreement abrogates the 1941 defense agreement
but provides for stationing U.S. civilian technicians at
Keflavik Airfield to assist in carrying out U.S. military
obligations in occupied Germany.
November
Iceland joins the united Nations.
1947
March
Last American troops are withdrawn from Iceland.
1948
April
Iceland joins the Organization for European Economic
Cooperation (OEEC), now the Organization for Economic
Cooperation and Development (OECM.
1949
April
Iceland joins NATO, but enjoins stationing of foreign troops
in the country during peacetime.
May
Iceland joins the Council of Europe.
1951
May
New U.3.- Iceland Defense Agreement provides for stationing
U.S. forces (Iceland Defense Forces) under NATO auspices
in Iceland to take over its defense and terminates Keflavik
Agreement.
December
Iceland joins the Nordic Council.
1956
March
Althinv resolution calls for the withdrawal of U.S. forces.
June
Iceland notifies the United States of its desire to begin
negotiations for revising the defense agreement.
12
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rvvvI WWI I W.
1956
December
The United States and Iceland agree oil the need for the
continued presence of U.S. forces.
1958
September
lceland extends its exclusive fishing belt from d to 12
nautical miles and thereby precipitates a 3 -year "cod war"
with Great Britain.
1959
October
Coalition government of Independence and Social Demo-
cratic Parties initiates economic stabilization program to
combat inflation.
1
Iceland wins international recognition for its 12 -mile fishing
limit and concludes a fishing agreement with the united
Kingdom, ending the cod war.
1963
June
National election provides parliamentary majority for con-
tinuance of sane coalition government.
1964
J;tne
After a long delay Iceland joins UNESCO, indicating its
desire to participate in world cultural activities.
1966
May
Dominant Independence Party registers losses and Social
Democrats gain in municipal elections.
1967
June
National election sustains the Independence- Social 1), mo-
cratic coalition.
1970
March
I celand joins EFTA.
1971
June
National election brings clown Independence Social Demo-
cratic malition.
July
The Progressive Party, People's Alliance, and Organization
of Liberals and Leftists form a center -left government.
197?
3 my
Iceland negotiates a limited free trade agreement with the
EC. Entry into force is made contingent on in acceptable
solution to Iceland's renewed fishing limits dispute with the
United Kingdom and West Gernuwy.
September
Iceland unilaterally extends the limits of its exclusive fishing
jurisdiction "rom 12 to 50 nautical miles.
1973
January
Volcanic eruption on Ileiniaey island imperils Vestman-
nacyjar, Iceland's chief fishing port..
13
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0)XFI'DI� XTIAt.
Area Brief to/au)
LAND:
Size: 39,750 sq. nii.
Use: 22 nivadows and pastures, 78'9. other
Coastline: 3,100 nii.
PEOPLE:
Population: 209,000 estimated .January 197:3; density 5 per-
sons per square mile; 84%o urban, RVY4 rural
Ethnically hon)ogen(1otis, racial stock essentially Nordic with
sligl?', Celtic admixture
Religion: 97.7'9, Lutheran, 2.3451 other Protestant groups,
Roman Catholic, and unaffiliated
Language: Icelandic
Literacy rate: 99.9'9)
Labor force: kpproxiniately 85,000 (1970), 25%. employed in
agriculture, fishing, or fish processing
Males 15 ��19: 49,700; 8.i' fit for military service
GOVERNMENT:
Deniocratic parliamentary republic; highly centralized form
of government; executive power exercised by President and
Cabinet; legislative authority rests with parliament
Political subdivisions: 14 incorporated towns; 2:3 rural dis-
tricts; 215 parishes
Principal parties: Independence Party, Progressive Party,
People's Alliance (Communist), Social Deniocratic Party,
Organization of Liberals and Leftists
Suffrage: 21 years of age, residence established for 5 years
prior to election, of sound mind, no criminal record, of un-
blemished character, and financially respons'ble
Dlember of IT.N. and specialized agencies, btATO, OECD,
Council of Europe, Nordic Council, EFTA, EC (free trade
agreement effective I )larch 197:3)
ECONOMY:
Agriculture: Principal products are dairy products, beef.
(Hutton and Iamb, wool, skins, hay; niust import most
foodstuffs
Major industries: Fish processing, aluminum
14
Electric power: Installed capacity 356,000 kw.; 1.0 billion
kw. -hr. produced in 1971; 7,700 kw. -hr. per capita
Exports: Fish and fish products, aluminumn. diatomite
Imports: Petroleum and petroleum products, wood, trans-
portation equipment, foodstuffs, aluminum oxide, foodstuffs
Major trading partners (1971): EFTA :36"% it nited King-
dom 13'%., Denmark 9%,), EC 22'9, West Gerniany 11%,),
United States 2.1 Cantmunist countries II
Exchange rate: 1 leelandie Krona CS,C(I.011.1
COMMUNICATIONS:
Highways: 7,400 miles; 47 miles concrete surfaced with some
bituminous stretches, approximately 4.760 miles crushed
stone (including lava) and gravel, 2,:19:3 miles unsurfaced
road and motorable track; 900 bridges and culverts 13 feet
or more in length, including 600 bridges between 35 and 960
feet: one tunnel; 47,011 registered motor vehicles, 40,786
passenger cars, 5,658 trucks, 567 buses.
Ports: 4 major, 50 minor
Merchant marine: 25 ships of 1,000 or more gross register
tons (g.r.t.), totaling :18,219 g.r.t. or 80,13111 deadweight tons
(d.w.t.); 230 ships het.ween 100 and 999 g.r.t., totaling about
130,800 g.r.t.
Civil air: 18 major registered transports
Airfields: 93 �sable. airfields, 5 seaplane stations, 15 airfield
sites; I airfields with permanent- surface runways; one field
with 10,015 -foot runway, I I fields with runways between
�1,000 and 7,999 feet; 78 fields with runways less than 1,000
feet.
Telecommunications: Adequate domestic and international
service provided by elemental but improving network,
predominantly open -wire tole; ::P system; 74,900 tclo-
phones; 75,000 radiobroadcast receivers; .10,000 TV receivers;
15 Ab1, 12 FI11, 73 TV broadcast stations; two 24- channel
coaxial submarine cables with 66 to 72 telegraph circuits per
cable; cables routed via Greenland to Canada, and via Faeroe
Islands to Scotland.
DEFENSE FORCES:
None; no conscription or compulsory military service
Supply: No capacity for production of arms, animunition, or
other military equipment
CONFIDIATIAL
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Arc(c C_fr, tg
Places and features referred to in this General Survey (u/ou)
COORDINATES
V
66
(D
7C'
6a
V7
500975 473
rk
?:.I Central
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o IN
o 111'.
o r Nr
a r )I
Akranes
64 19
22 06
Nlivatn (lake)
65 :36
17 00
Akureyri
(35 10
18 06
Neskaupstadhur
65 09
13 42
1316ndu6s
65 �10
20 18
Oddeyri( spit)..........................
65 4:
18 05
Burfell
64 05
20 rib
Raufarhofn
66 27
15 57
Eidhar
65 22
14 21
Reykjavik
64 09
21 57
Engey isl
65 32
23 09
Reykjanes (peninsula)..................
63 50
2 41
Eyjafj6rdhur
65 54
18 15
Sandgerdhi
64 03
22 42
Eyrarbakki
63 52
21 09
Saudharkr6kur
65 45
19 39
Faxafl6i( bay)
64 24
23 00
Selfoss.........
63 56
21 00
Frederiksdal, Greenland
59 59
44 37
Seltjarnarnes
64 08
21 56
Gairloch. Scotland
57 42
05 40
Scydhisfj6rdhur
65 16
14 00
Geithals farm)
64 06
21 42
Sigalda hil ls)
64 09
19 15
Grandagardhur (breakwalcr)
64 "9
21 56
Siglufj6rdhur
66 09
15 55
Grfmsey (isl)
66 3:3
18 00
Skerjafjordhur
64 07
22 00
Grindavik
63 50
22 26
S str at
63 59
20 rig
Hafnarfjbrdhur
64 04
21 57
Straumsvik (core).......................
64 03
22 02
Hampden, Canada
49 32
56 rig
Stykkish6lmur
65 04
22 44
lleimaey (isl)
63 8(i
20 17
I' hu
65 33
20 25
116fn
(;.1 15
15 1:3
Thorlkkshofn
63 51
21 22
llvalfj6rdhur (fiord)
61 22
21 39
Urshavn, Fceroe Islands................
62 01
06 �16
Hvathakur (isl)
64 36
1:3 14
Vatnt&kull (ice cap)
64 24
16 48
Hvannadalshn6kur (ml)
64 01
16 41
Vestmannaeyjar
63 26
20 1(i
fsaf, lordhur
66 05
23 09
Vestmannaeyjar (is /s)...................
63 25
20 18
Keflavik
64 01
22 34
Vik.........
6:3 25
19 01
Kolbeinsey (isl)
67 07
18 36
Kollafjordhur (bay)
64 12
21 50
Selected airfields
K6pavogur
64 06
21 Sri
Laki (volcano)
64 04
18 14
Keflavik
63 rig
22 36
Laugarvatn (farm)
64 1:3
20 44
Reykjavik
64 08
21 513
V
66
(D
7C'
6a
V7
500975 473
rk
?:.I Central
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"I tat h 0 h
isaf! dku
01
hur
S d
J
1 volinotiordlux
ain r
*K
S a ydh I u r Neskaulistat1hur
Styk it ishii Imu r EsklfjOhur
Au
Reykjavik
Sandg dlNi Gardhar tirle 11
.0 HainarfJ iif"
elCa St. navIk
Aluminum smelter Gr a v ik
Cement plant
Diatomite plant �tmannaeylar
11 Hydroelectric plant
4 rishing port and proc,,-sso ',I r�nter Land Utilization
Agriculture predominant may, Pwitoes,
hardy vegetables) with so;.!e dairy cattle and sheep and Economic Activity
Grazing predominant, with some agriculture
Permanent ice and snow
Waste land
118 15 Arctic Circ le__
Grimsey
Raufarhofn
Th,stiltiOrd"
K pasker'
6 Thofn
A x a r f;o rd h u r
6rshfn
'Th
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Iuf,llrd sf;ialfandi 66
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ordhur
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opm. 16rdhu
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0 S P.
kureyr
0 410
a ,H 11 /jL{yygLr ti?., I .r r u 1
Z
A Egilsstadh bur
eydriis!ti
2336. a upstadhur
IX
ifibrdhac
7
Bijdhreyri
15' r
4751 Bodhir
579i
HOF'SJOKULL
.4094 ra 0 upiv ul
.0
VATNAJOKULL
+2 I 5659 i
H6
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Th6risvafn 6_1
P 4a ki 4 :1, X f 4r AvqnnadafshrWuk6r
6952
T 7
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Population and
Administrative Divisions
,V la.. I
Gfirriscy
Greenland Sea
J IM Ntll J K UL L Siglufj6rdhur
Ht
HLtnafldi
vit 5,
re
BreidhRf,`drdhu 23-5.9.
E
Akrane,,, 07
V alit
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LA
BOrfell
Selfoss
yrarbakki
Aiks
tokkseyri
sva
Thvera
Heimaey
North Atlantic,'Ocean
Xr Lj.bj,,
Central Intelligence Agency For fin Use n y4
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"Ihnl I%rV a va� a vr yr vvr ay. vaa awa v
No plant 110,4"
aluclnc plant yealmakneeylar
11 poi, an I plocn!t 1 ha outer
Altur Land Utilization
a prndommanl thay. polatuos.
y vayIelab!t!M with sorno dairy (,tlllu and sheep and Economic Activity
lg prvi.lom aril, with `il)n1r� a,
anont wo and 4n now
B la nd
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I
i
I
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n..nnnn
K6pasker'
Axarflardhur
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1�i
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7 I This Piltiordhur 1 I
T 6rsholn I
Bakka!lol I I,
Husavik
V-
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P
vopnahcrdhur
z I 1! o� opnifj6rdhu I
I
I
it s. 3 J r 's' /tor I
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r ,LAVA t I
Egdsstadhl
eydhjsljb her
�f
At I aupstadhur
kjfjbrdhur
Budhaeyrl N
dam`,\, 4731 l Budhr Y I y
J C r
k 1 e 1. LAVA t s_ r
3791 i I 'I III l
HOFSJ6KULi
JG9a ..t Diipivogur
E isa I q-
VATNAJOKULL
fhorisvatn
LS-
L 7
57 :.�s 1 o; y
Hvannadalshnukbr
64
Iceland
Year -round road Populated places
Seasonal road or track EE 81.475
Path or trail (not motorable) ID- 3.000 to ii.000
0 800 to 3,000
Airfield Under 800
1. Major port
Spot elevations in feet
Scale 1:1,510,000
a 25 5C 75
Statute M.h+s
e 25 50 75
18
6
Summary Map
Norm,i are not ner-esserdy authoritative
APPROVED FOR RELEASE: 2009/06/16: CIA- RDP01- 00707R000200110044 -5