Iceland. According to
countryaah, Iceland's fishing dispute with the EU and Norway
(since 2010) continued during the year. Iceland claimed that
the sharply increased stock of mackerel in the Icelandic
waters was due to climate change and elevated temperature in
the sea, and that it was therefore natural that the catch
quotas accompanied the fish migration to Iceland. But
Iceland's unilaterally raised quota and dramatically
increased catches in 2011 led to EU threats of sanctions. In
February, the EU Fisheries Commissioner and the Norwegian
Fisheries Minister expressed strong criticism of Iceland's
steadfast attitude in the negotiations. According to the EU,
Iceland is threatening the long-term development of a
sustainable mackerel stock. In September, the EU offered
Iceland 7% of the North Atlantic mackerel quota, but Iceland
demanded 16%. At that time, the European Parliament decided
that sanctions with import bans on Icelandic mackerel and
landing bans in EU ports should be resorted to if the
negotiations became unsuccessful. The Council of Ministers
supported the decision.
Cod, which is Iceland's most important export commodity,
had been steadily increasing due to restraining catch quotas
for several years, and in 2012 there was more cod in
Icelandic waters than in nearly three decades.
Negotiations on EU membership went slower than before,
since the negotiating climate was affected by the mackerel
dispute. In the government, there was conflict over the
negotiations, where a couple of Left-Green ministers wanted
the negotiations to be re-examined. In the popular opinion,
close to 54% said no to EU membership, and just over 27%
In March, the national court process started against
former Prime Minister Geir Haarde, who was accused of
neglect in the banking crash in 2008. Haarde denied and saw
the trial as political. In April, Haarde was released on
three out of four counts but was convicted of not calling
for special government meetings during the 2008 crisis.
Haarde claimed that the verdict was a violation of the
European Convention on Human Rights and took the matter to
the European Court of Justice.
China's Prime Minister Wen Jiabao began his European trip
in April with an official visit to Iceland, which does not
belong to the EU. This led to a debate about China's
interest in natural resources in the Northern Calotte. A
Chinese entrepreneur is in dispute with the Government of
Iceland about buying land, which according to some
speculation would be the cover for a future naval base and
part of a larger strategy on China's part to gain a foothold
in the region.
In June, President Ólafur Ragnar Grímsson was re-elected
for a fifth term. He got close to 53% of the votes and
defeated his challenger, TV reporter Thora Arnórsdóttir, who
got just over 33%.
After several resignations from the left-wing coalition
in parliament, the government lost its majority in October
and held only 31 of the 63 seats.
During the autumn, the EFTA Court raised the dispute
between Iceland, on the one hand, and the UK and the
Netherlands, on the other, for compensation to the foreign
savers of the bankrupt bank Icesave. Iceland was accused of
discriminating against foreign savers. But financially
Iceland seemed to be able to resolve the conflict when
bankruptcy managers found new assets in Icesave so that the
owners could pay compensation. In October, an advisory
referendum was held on a proposal for a new constitution
that had been compiled by a citizen group in consultation
with Icelanders on Twitter and Facebook, among others. Two
thirds voted in favor of the proposal.
Unemployment continued to decline during the year and
stood at around 5% during the autumn. In addition to good
fishing, the important aluminum industry had high world
market prices and tourism went well thanks to the low
exchange rate of the Icelandic krona. The upturn in the
economy enabled Iceland to pay off its international loans
early, which further improved the state's finances.