Geir was mayor of Reykjavík from 1959 to 1972. During his term he greatly expanded the city and improved its infrastructure. Under his guidance the geothermal heating system was expanded to the whole city; it had previously only been available to less than half. He also improved the streets by turning the mostly gravel roads into modern asphalt streets. He was popular as mayor and in an open primary for the municipal elections he won 99% of the votes in 1970. In the fall of 1970 he came in number one in the primary for elections to Althing, ahead of prime minister Jóhann Hafstein and former mayor Gunnar Thoroddsen. He was a member of parliament from 1970 until 1983. In 1971 he was elected vice chairman of the Independence Party and in 1973 he became chairman after Jóhann Hafstein resigned for health reasons. In 1974 he led the Independence Party to one of its greatest victories. The party won 42.5% of the vote and 25 out of 60 parliamentary seats. He then led a coalition government with the Progressive party from 1974 to 1978. His government expanded the fishing limits to 200 miles and had to fight Britain in the 'Cod War'. After Iceland had broken diplomatic relations with Britain in 1976 over the dispute, negotiations led to an agreement in June that year. According to the agreement Britain accepted the 200 mile zone. In 1978 the government suffered a setback after it had set a law that limited wage increases. The law was an attempt to curb inflation, which was running close to 50%. The two government parties lost five parliamentary seats each and a new coalition government was formed without the Independence Party. A year later the Independence Party failed to make significant gains in an election after the government had resigned. Geir also faced opposition within his own party and came in number two in primary elections in 1978. Albert Gudmundssson won the first seat. A year later Geir won the first seat back. He twice won elections against his opponents for the chairmanship. In both 1979 and 1981 he received about 75% of the vote, first against Albert Gudmundsson and then against Pálmi Jónsson, then minister of agriculture. In 1980 the vice chairman of the Independence Party, Gunnar Thoroddsen, decided to break ranks within the party and lead a group of four members to form a coalition government with the People's Alliance and the Progressive Party. Geir was leader of the opposition. The Independence Party was united in the 1983 parliamentary election. However Geir suffered a setback when he came in seventh in the primary for the parliamentary elections and lost his seat in parliament. After the elections he announced that he would not seek re-election as party chairman. He served as foreign minister in the coalition government with the Progressive Party from 1983 until 1986. He left government in 1986, becoming one of the three Governors of the Central Bank of Iceland, a position he held till his death in September 1990.
