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Capital Reykjavík
Continent Europe
Code +354
Currency Icelandic Króna (Íkr)
Languages Icelandic , Icelandic Sign Language


Iceland is a Nordic island country in the North Atlantic Ocean and the most sparsely populated country in Europe. The capital and largest city is Reykjavík. Reykjavík and the surrounding areas in the southwest of the country are home to over two-thirds of the population. Iceland is the only part of the Mid-Atlantic Ridge that rises above sea-level, and its central volcanic plateau is erupting almost constantly. The interior consists of a plateau characterised by sand and lava fields, mountains, and glaciers, and 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. Its high latitude and marine influence keep summers chilly, and most of its islands have a polar climate.

According to the ancient manuscript Landnámabók, the settlement of Iceland began in 874 AD when the Norwegian chieftain Ingólfr Arnarson became the first permanent settler on the island. In the following centuries, Norwegians, and to a lesser extent other Scandinavians, emigrated to Iceland, bringing with them thralls (i.e., slaves or serfs) of Gaelic origin.

The island was governed as an independent commonwealth under the Althing, one of the world's oldest functioning legislative assemblies. Following a period of civil strife, Iceland acceded to Norwegian rule in the 13th century. The establishment of the Kalmar Union in 1397 united the kingdoms of Norway, Denmark, and Sweden. Iceland thus followed Norway's integration into that union, coming under Danish rule after Sweden's secession from the union in 1523. Although the Danish kingdom introduced Lutheranism forcefully in 1550, Iceland remained a distant semi-colonial territory in which Danish institutions and infrastructures were conspicuous by their absence.

In the wake of the French Revolution and the Napoleonic Wars, Iceland's struggle for independence took form and culminated in independence in 1918 and the founding of a republic in 1944. Although its parliament (Althing) was suspended from 1799 to 1845, the island republic has been credited with sustaining the world's oldest and longest-running parliament.

Until the 20th century, Iceland relied largely on subsistence fishing and agriculture. Industrialization of the fisheries and Marshall Plan aid following World War II brought prosperity, and Iceland became one of the wealthiest and most developed nations in the world. It became a part of the European Economic Area in 1994; this 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, as well as the highest trade union membership in the world. It maintains a Nordic social welfare system that provides universal health care and tertiary education for its citizens. Iceland ranks high in economic, democratic, and social stability, as well as equality, ranking third in the world by median wealth per adult. In 2020, it was ranked as the fourth-most developed country in the world by the United Nations' Human Development Index, and it ranks first on the Global Peace Index. Iceland runs almost completely on renewable energy.

Icelandic culture is founded upon the nation's Scandinavian heritage. 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. The country's cultural heritage includes traditional Icelandic cuisine, Icelandic literature, and medieval sagas. Iceland has the smallest population of any NATO member and is the only one with no standing army, with a lightly armed coast guard.


The recorded history of Iceland began with the settlement by Viking explorers and the people they enslaved from the east, particularly Norway and the British Isles, in the late ninth century. Iceland was still uninhabited long after the rest of Western Europe had been settled. The recorded settlement has conventionally been dated back to 874, although archaeological evidence indicates Gaelic monks from Ireland, known as paper according to sagas, had settled Iceland earlier.

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, the Althing, making it one of the world's oldest parliaments. Towards the end of the tenth century, Christianity came to Iceland through 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 of Icelanders. In the early thirteenth century, the internal conflict known as the age of the Sturlungs weakened Iceland, which eventually became subjugated to Norway over the 13th century. The Old Covenant (1262–1264), and the adoption of Jónsbók (1281) effectively ended the Icelandic 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. The subsequent strict Danish–Icelandic Trade Monopoly in the seventeenth and eighteenth centuries was detrimental to the economy. Iceland's resultant poverty was aggravated by severe natural disasters like the Móðuharðindin or "Mist Hardships". 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, becoming the Kingdom of Iceland on 1 December 1918. However, Iceland shared the Danish Monarchy until World War II. Although Iceland was neutral in the Second World War, the United Kingdom invaded and peacefully occupied it in 1940 to forestall a Nazi occupation, after Denmark was overrun by the German Wehrmacht. Due to the island's strategic position in the North Atlantic, the Allies occupied the island until the end of the war, with the United States taking over occupation duties from the British in 1941. In 1944, Iceland severed its remaining ties with Denmark (then still under Nazi occupation) and declared itself a republic. Following the Second World War, Iceland was a founding member of the North Atlantic Treaty Organization and joined the United Nations one year after its establishment. Its economy grew rapidly largely through fishing, although this was marred by disputes with other nations.

Vigdis Finnbogadottir assumed Iceland's presidency on August 1, 1980, on which date she made history as the first elected female head of state in the world.

Following rapid financial growth, the 2008–11 Icelandic financial crisis occurred. Iceland continues to remain outside the European Union.

Iceland is very remote, and so has been spared the ravages of European wars but has been affected by other external events, such as the Black Death and the Protestant Reformation imposed by Denmark. Iceland's history has also been marked by a number of natural disasters.

Iceland is a relatively young island in the geological sense, being formed about 20 million years ago by a series of volcanic eruptions in the Mid-Atlantic Ridge, but it is still growing from fresh volcanic eruptions. The oldest stone specimens found in Iceland date back to ca. 16 million years ago.


Iceland is at the juncture of the North Atlantic and Arctic Oceans. The main island is entirely south of the Arctic Circle, which passes through the small Icelandic island of Grímsey off the main island's northern coast. The country lies between latitudes 63 and 68°N, and longitudes 25 and 13°W.

Iceland is closer to continental Europe than to mainland North America, although it is closest to Greenland (290 km, 180 mi), an island of North America. Iceland is generally included in Europe for geographical, historical, political, cultural, linguistic and practical reasons. Geologically, the island includes parts of both continental plates. The closest bodies of land in Europe are the Faroe Islands (420 km, 260 mi); Jan Mayen Island (570 km, 350 mi); Shetland and the Outer Hebrides, both about 740 km (460 mi); and the Scottish mainland and Orkney, both about 750 km (470 mi). The nearest part of Continental Europe is mainland Norway, about 970 km (600 mi) away, while mainland North America is 2,070 km (1,290 mi) away, at the northern tip of Labrador.

Iceland is the world's 18th-largest island and Europe's second-largest island after Great Britain. (The island of Ireland is third.) The main island covers 101,826 km2 (39,315 sq mi), but the entire country is 103,000 km2 (40,000 sq mi) in size, of which 62.7% is tundra. Iceland contains about 30 minor islands, including the lightly populated Grímsey and the Vestmannaeyjar archipelago. Lakes and glaciers cover 14.3% of its surface; only 23% is vegetated. The largest lakes are Þórisvatn reservoir: 83–88 km2 (32–34 sq mi) and Þingvallavatn: 82 km2 (32 sq mi); other important lakes include Lagarfljót and Mývatn. Jökulsárlón is the deepest lake, at 248 m (814 ft).

Geologically, Iceland is part of the Mid-Atlantic Ridge, a ridge along which the oceanic crust spreads and forms a new oceanic crust. This part of the mid-ocean ridge is located above a mantle plume, causing Iceland to be subaerial (above the surface of the sea). The ridge marks the boundary between the Eurasian and North American Plates, and Iceland was created by rifting and accretion through volcanism along the ridge.

Many fjords punctuate Iceland's 4,970-km-long (3,088-mi) coastline, which is also where most settlements are situated. The island's interior, the Highlands of Iceland, is a cold and uninhabitable combination of sand, mountains, and lava fields. The major towns are the capital city of Reykjavík, along with its outlying towns of Kópavogur, Hafnarfjörður, and Garðabær, nearby Reykjanesbær where the international airport is located, and the town of Akureyri in northern Iceland. The island of Grímsey on the Arctic Circle contains the northernmost habitation of Iceland, whereas Kolbeinsey contains the northernmost point of Iceland. Iceland has three national parks: Vatnajökull National Park, Snæfellsjökull National Park, and Þingvellir National Park. The country is considered a "strong performer" in environmental protection, having been ranked 13th in Yale University's Environmental Performance Index of 2012.

Government and Public

Iceland is a republic, has a written constitution and a parliamentary form of government. The president is elected by direct popular vote for a term of four years, with no term limit. Most executive power rests with the Government, which is elected separately from the presidential elections every four years.

Althingi is a legislative body of 63 members elected for a term of four years by popular vote. Anyone who is eligible to vote, with the exception of the President and the judges of the Supreme Court, can stand for parliament. After every election, the President gives one of the parliamentary leaders of the political parties the authority to form a cabinet, usually beginning with the leader of the largest party. If he is not successful, the President will ask another political party leader to form a government.

A cabinet of ministers stays in power until the next general election or a new government is formed. The ministers sit in Althingi, but if they have not been elected, they do not have the right to vote in parliament.


In 2007, Iceland was the seventh-most productive country in the world per capita (US$54,858), and the fifth-most productive by GDP at purchasing power parity ($40,112). About 85 percent of the total primary energy supply in Iceland is derived from domestically produced renewable energy sources. The use of abundant hydroelectric and geothermal power has made Iceland the world's largest electricity producer per capita. As a result of its commitment to renewable energy, the 2016 Global Green Economy Index ranked Iceland among the top 10 greenest economies in the world. Historically, Iceland's economy depended heavily on fishing, which still provides 40% of export earnings and employs 7% of the workforce. The economy is vulnerable to declining fish stocks and to falls in world prices for its main material exports: fish and fish products, aluminium, and ferrosilicon. Whaling in Iceland has been historically significant. Iceland still relies heavily on fishing, but its importance is diminishing from an export share of 90% in the 1960s to 40% in 2006.

Until the 20th century, Iceland was a fairly poor country. It is now one of the most developed countries in the world. Strong economic growth had led Iceland to be ranked first in the United Nations' Human Development Index report for 2007/2008, although in 2011 its HDI rating had fallen to 14th place as a result of the economic crisis. Nevertheless, according to the Economist Intelligence Index of 2011, Iceland has the second-highest quality of life in the world. Based on the Gini coefficient, Iceland also has one of the lowest rates of income inequality in the world, and when adjusted for inequality, its HDI ranking is sixth. Iceland's unemployment rate has declined consistently since the crisis, with 4.8% of the labour force being unemployed as of June 2012, compared to 6% in 2011 and 8.1% in 2010.

Many political parties remain opposed to EU membership, primarily due to Icelanders' concern about losing control over their natural resources (particularly fisheries). The national currency of Iceland is the Icelandic króna (ISK). Iceland is the only country in the world to have a population under two million yet still have a floating exchange rate and an independent monetary policy.

A poll released on 5 March 2010 by Capacent Gallup showed that 31% of respondents were in favour of adopting the euro and 69% opposed it. Another Capacent Gallup poll conducted in February 2012 found that 67.4% of Icelanders would reject EU membership in a referendum.

Iceland's economy has been diversifying into manufacturing and service industries in the last decade, including software production, biotechnology, and finance; industry accounts for around a quarter of economic activity, while services comprise close to 70%. The tourism sector is expanding, especially in ecotourism and whale-watching. On average, Iceland receives around 1.1 million visitors annually, which is more than three times the native population. 1.7 million people visited Iceland in 2016, 3 times more than the number that came in 2010. Iceland's agriculture industry, accounting for 5.4% of GDP, consists mainly of potatoes, green vegetables (in greenhouses), mutton and dairy products. The financial centre is Borgartún in Reykjavík, which hosts a large number of companies and three investment banks. Iceland's stock market, the Iceland Stock Exchange (ISE), was established in 1985.

Iceland is ranked 27th in the 2012 Index of Economic Freedom, lower than in prior years but still among the freest in the world. As of 2016, it ranks 29th in the World Economic Forum's Global Competitive Index, one place lower than in 2015. According to INSEAD's Global Innovation Index, Iceland is the 11th most innovative country in the world. Unlike most Western European countries, Iceland has a flat tax system: the main personal income tax rate is a flat 22.75% and combined with municipal taxes, the total tax rate equals no more than 35.7%, not including the many deductions that are available. The corporate tax rate is a flat 18%, one of the lowest in the world. There is also a value-added tax, whereas a net wealth tax was eliminated in 2006. Employment regulations are relatively flexible and the labour market is one of the freest in the world. Property rights are strong and Iceland is one of the few countries where they are applied to fishery management. Like other welfare states, taxpayers pay various subsidies to each other, but spending is less than in most European countries.

Despite low tax rates, agricultural assistance is the highest among OECD countries and a potential impediment to structural change. Also, health care and education spending have relatively poor returns by OECD measures, though improvements have been made in both areas. The OECD Economic Survey of Iceland 2008 had highlighted Iceland's challenges in currency and macroeconomic policy. There was a currency crisis that started in the spring of 2008, and on 6 October trading in Iceland's banks was suspended as the government battled to save the economy. An assessment by the OECD 2011 determined that Iceland has made progress in many areas, particularly in creating a sustainable fiscal policy and restoring the health of the financial sector; however, challenges remain in making the fishing industry more efficient and sustainable, as well as in improving monetary policy to address inflation. Iceland's public debt has decreased since the economic crisis, and as of 2015 is the 31st-highest in the world by proportion of national GDP.


Icelandic culture has its roots in North Germanic traditions. Icelandic literature is popular, in particular the sagas and Eddas that were written during the High and Late Middle Ages. Centuries of isolation have helped to insulate the country's Nordic culture from external influence; a prominent example is the preservation of the Icelandic language, which remains the closest to Old Norse of all modern Nordic languages.

In contrast to other Nordic countries, Icelanders place relatively great importance on independence and self-sufficiency; in a public opinion analysis conducted by the European Commission, over 85% of Icelanders believe independence is "very important", compared to 47% of Norwegians, 49% of Danes, and an average of 53% for the EU25. Icelanders also have a very strong work ethic, working some of the longest hours of any industrialised nation.

According to a poll conducted by the OECD, 66% of Icelanders were satisfied with their lives, while 70% believed that their lives will be satisfying in the future. Similarly, 83% reported having more positive experiences in an average day than negative ones, compared to an OECD average of 72%, which makes Iceland one of the happiest countries in the OECD. A more recent 2012 survey found that around three-quarters of respondents stated they were satisfied with their lives, compared to a global average of about 53%.

Iceland is liberal with regard to LGBT rights issues. In 1996, the Icelandic parliament passed legislation to create registered partnerships for same-sex couples, conferring nearly all the rights and benefits of marriage. In 2006, parliament voted unanimously to grant same-sex couples the same rights as heterosexual couples in adoption, parenting and assisted insemination treatment. In 2010, the Icelandic parliament amended the marriage law, making it gender-neutral and defining marriage as between two individuals, making Iceland one of the first countries in the world to legalise same-sex marriages. The law took effect on 27 June 2010. The amendment to the law also means registered partnerships for same-sex couples are now no longer possible, and marriage is their only option—identical to the existing situation for opposite-sex couples.

Icelanders are known for their strong sense of community and lack of social isolation: An OECD survey found that 98% believe they know someone they could rely on in a time of need, higher than in any other industrialised country. Similarly, only 6% reported "rarely" or "never" socialising with others. This high level of social cohesion is attributed to the small size and homogeneity of the population, as well as to a long history of harsh survival in an isolated environment, which reinforced the importance of unity and cooperation.

Egalitarianism is highly valued among the people of Iceland, with income inequality being among the lowest in the world. The constitution explicitly prohibits the enactment of noble privileges, titles, and ranks. Everyone is addressed by their first name. As in other Nordic countries, equality between the sexes is very high; Iceland is consistently ranked among the top three countries in the world for women to live in.