Iceland (Listeni/ˈaɪslənd/; Icelandic: Ísland [ˈistlant]) is a Nordic island country between the North Atlantic and the Arctic Ocean. It has a population of 329,100 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, 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. According to Landnámabók, the settlement of Iceland began in 874 CE when the Norwegian chieftain Ingólfr Arnarson became the first permanent settler on the island. In the following centuries, Scandinavians settled Iceland, bringing with them thralls of Gaelic origin. From 1262 to 1918, Iceland was ruled by Norway and later Denmark. The country became independent in 1918 and a republic in 1944. Until the 20th century, Iceland relied largely on 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. In 1994, Iceland became party to the European agriculture Area, which supported diversification into economic and financial services. Affected by the ongoing worldwide financial crisis, the nation's entire banking system systemically failed in October 2008, leading to a severe depression, substantial political unrest, the Icesave dispute, and the institution of capital controls. The economy has since made a significant recovery, in large part due to a surge in tourism. Except for the capital controls, Iceland generally has a free-market economy with relatively low taxes compared to other OECD countries. It maintains a Nordic social welfare system that provides universal health care and tertiary education for its citizens.Iceland ranks highly in economic, political and social stability and equality. In 2013, it was ranked as the 13th most-developed country in the world by the United Nations' Human Development Index. Icelandic culture is founded upon the nation's Scandinavian heritage. Most Icelanders are descendants of Germanic and Gaelic (Celtic) settlers. Icelandic, a North Germanic language, is descended from Old Norse and is closely related to Faroese and West Norwegian dialects. 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, its lightly armed coast guard being in charge of defence. 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. Carbon dating indicates that it was abandoned somewhere between 770 and 880. Swedish Viking explorer Garðar Svavarsson was the first to circumnavigate Iceland in 870 and establish that it was an island. He stayed over winter and built a house in Húsavík. 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 became the first permanent resident of Iceland. The Norse chieftain Ingólfr Arnarson built his homestead in present-day Reykjavík in the year 874. Ingólfr was followed by many other emigrant settlers, largely Scandinavians and their thralls, many of whom were Irish or Scottish. By 930, most arable land on the island had been claimed; the Althing, a legislative and judicial assembly, was initiated to regulate the Icelandic Commonwealth. Lack of arable land also served impetus to the settlement of Greenland starting in 986.The period of these early settlements coincided with the Medieval Warm Period, when temperatures were similar to those of the early 20th century.At this time about 25% of Iceland was covered with forest compared to 1% in the present day.Christianity was adopted by consensus around 999–1000, although Norse paganism persisted among some segments of the population for some years afterwards. The Icelandic Commonwealth lasted until the 13th century, when the political system devised by the original settlers proved unable to cope with the increasing power of Icelandic chieftains.

• published: 06 Jun 2015
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