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Lack of arable land also served impetus to the settlement of Greenland starting in 986.
The internal struggles and civil strife of the Age of the Sturlungs led to the signing of the Old Covenant in 1262, which ended the Commonwealth and brought Iceland under the Norwegian crown.
According to both Landnámabók and Íslendingabók, Celtic monks known as the Papar lived in Iceland before Scandinavian settlers arrived, possibly members of a Hiberno-Scottish mission.
Recent archaeological excavations have revealed the ruins of a cabin in Hafnir on the Reykjanes peninsula.
Garðar departed the following summer but one of his men, Náttfari, decided to stay behind with two slaves.
Náttfari settled in what is now known as Náttfaravík and he and his slaves became the first permanent residents of Iceland The Norwegian-Norse chieftain Ingólfr Arnarson built his homestead in present-day Reykjavík in 874.
In 1994, it became a part of the European Economic Area, which further diversified the economy into sectors such as finance, biotechnology, and manufacturing.
Iceland has a market economy with relatively low taxes, compared to other OECD countries.
The sagas say that the rather despondent Flóki climbed a mountain and saw a fjord (Ísafjörður) full of icebergs, which led him to give the island its new and present name. Reykjavík and the surrounding areas in the southwest of the country are home to over two-thirds of the population. The interior consists of a plateau characterised by sand and lava fields, mountains, and glaciers, while many glacial rivers flow to the sea through the lowlands.Iceland is warmed by the Gulf Stream and has a temperate climate, despite a high latitude just outside the Arctic Circle.Most Icelanders are descendants of Norse and Gaelic settlers.Icelandic, a North Germanic language, is descended from Old West Norse and is closely related to Faroese and West Norwegian dialects.