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Iceland (Icelandic: Ísland; [ˈistlant] (listen)) is a Nordic island country in the North Atlantic Ocean, with a population of 356,991 and an area of 103,000 km2 (40,000 sq mi), making it 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 volcanically and geologically active. 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, with most of the archipelago having 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. Industrialisation 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, social stability, and equality, ranking third in the world by median wealth per adult. In 2018, it was ranked as the sixth-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.
Hit hard by the worldwide financial crisis, the nation's entire banking system systemically failed in October 2008, leading to an economic crisis and the collapse of the country's three largest banks. The crisis prompted substantial political unrest, the Icesave dispute, and the institution of capital controls (imposed in 2008 and lifted in 2017). By 2014, the Icelandic economy had made a significant recovery, in large part due to a surge in tourism.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.
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