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Iceland

Yearbook 2010

Iceland. According to COUNTRYAAH, 2010 was the year when the world learned the name of the Icelandic volcano Eyjafjallajökull. Eyjafjallajökull east of Reykjavík experienced several outbreaks during the spring which spread ash clouds across much of Europe and occasionally blocked air traffic in many countries, including Sweden. In the vicinity of the volcano, hundreds of Icelanders were temporarily forced to leave their homes.

2010 Iceland

At the same time, Iceland's economy began to slowly recover from the deep crisis that followed the bank collapse two years earlier. GDP turned upward in the fall and unemployment fell to 6 percent (from over 9 percent in 2009).

But the year began as the previous one ended, in contravention of the so-called Icesave law, which was passed by the Swedish Parliament before New Year. It stated that Iceland would pay EUR 3.8 billion in compensation to British and Dutch savers who suffered the bankruptcy of the Icelandic Internet bank Icesave in 2008.

Due to popular protests against the law, President Ólafur Ragnar Grímsson refused to sign it. Instead, a referendum on the law was announced. The government tried to negotiate a more favorable settlement with the United Kingdom and the Netherlands in order to avoid the referendum, but it failed. Prime Minister Jóhanna Sigurđardóttir then urged Icelanders to stay home and not vote. But more than 62 percent of voters took part in the vote, which was a devastating victory for the No side. 93.2 percent rejected the Icesave law and only 1.8 percent voted for it. The rest were invalid votes. At the end of the year, Iceland agreed with the Netherlands and the UK on a new agreement on Icesave, which became significantly cheaper for Iceland.

The European Commission recommended during the year that Iceland should start negotiations on EU membership. A lot of legislation was already adapted to the EU, but fishing was expected to be a difficult issue, among other things. The EU's yes was confirmed by the Union's Heads of State and Government and by the Foreign Ministers. In July negotiations could start.

After the Icelandic banking crash in 2008, a public inquiry had been set up to investigate the causes. The report was presented during the year and pointed to the banks' rapid and excessive growth as the main cause. The size of the banks had doubled in the years 2001–08, and when the state took over, the assets were written down by five times Iceland's GDP.

The Commission also criticized seven leading politicians and officials for "extremely serious negligence". During the fall, the Parliament decided that one of them, former Prime Minister Geir Haarde, would be brought before the national court for his role in the banking and financial crisis. The other ministers criticized in Parliament's review report were released.

The Social Democrats and the Green Left, who ruled nationally, lost big in the municipal elections in Reykjavík in May. In the wake of the economic crisis, the election became a victory for the newly formed populist Best Party (Besti Flockman), which took 34.7 percent of the vote in the capital, followed by the Independence Party (in opposition nationally). The best party leader, comedian Jón Gnarr, became the new mayor of Reykjavík.

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