The recorded history of Iceland began with the settlement by Viking explorers and their slaves from the east, particularly Norway and the British Isles, in the late 9th century, since Iceland was uninhabited long after the rest of western Europe was settled. Recorded settlement has conventionally been dated back to 874 AD, although archaeological evidence indicates Gaelic monks had settled Iceland previously. The land was settled quickly, mainly by Norwegians who may have been fleeing conflict or seeking new land to farm. By 930, the chieftains had established a form of governance (Althing), making it one of the world's oldest parliaments. Also towards the end of the tenth century Christianity came to Iceland due to the influence of the Norwegian king, Olaf Tryggvason. During this time Iceland remained independent, a period known as the Old Commonwealth and Icelandic historians began to document the nation's history in books referred to as Sagas (Icelandic for story or history). In the early thirteenth century internal conflict (Age of the Sturlungs) weakened Iceland which eventually became subjugated to Norway through the Old Covenant (1262–4), effectively ending the Commonwealth. Norway in turn was united with Sweden (1319) and then Denmark (1376). Eventually, all of the Nordic states were united in one alliance, the Kalmar Union (1397–1523), but on its dissolution Iceland fell under Danish rule. Denmark then imposed a strict trade monopoly in the 17th and 18th centuries, much to the detriment of the Icelandic economy. Iceland's subsequent poverty was aggravated by natural disasters. During this time the population declined.
Iceland remained part of Denmark, but in keeping with the rise of nationalism around Europe in the nineteenth century an independence movement emerged. The Althing, which had been suspended in 1799, was restored in 1844, and Iceland gained sovereignty after World War I, on 1 December 1918. However Iceland shared the Danish Monarchy until World War II. Although Iceland was neutral, the allies occupied it without resistance because of its strategic situation. Since Denmark was under Nazi occupation, Iceland declared itself a republic, and the Republic of Iceland was founded on 17 June 1944 as a fully independent nation. Following the Second World War Iceland was a founding member of the United Nations and grew rapidly, largely due to fishing, although this was marred by conflicts with other nations (Cod Wars). Following rapid financial growth, the economy collapsed in 2008. Today Iceland still struggles with the aftermath of the financial crisis. Iceland has adopted currency barriers that are almost unique in the history of modern Europe. Now tourism accounts for the second largest source of revenue. Iceland continues to remain outside the European Union.
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