The capital of northern Iceland, Akureyri is set in Eyjafjordur, a lovely fjord district. The original settlement was first established to the south at Kristnes. It is not known exactly when trading began in Akureyri, but when the Danish trade monopoly was enforced in 1602 Danish merchants were allocated rights to trade here. The town attained municipal status in 1862. Because of its excellent natural harbor and good communications, Akureyri has become north Iceland's most important center of education, trade and industry. It is also the heart of the cooperative movement in the country with many coop concerns established in dairy and farm products. Surrounded by mountains, it is a town where urban, rural and marine life mix easily, and where a proud community spirit prevails.