<P> Iceland joined the European Economic Area in 1994, after which the economy was greatly diversified and liberalised . International economic relations increased further after 2001, when Iceland's newly deregulated banks began to raise massive amounts of external debt, contributing to a 32% increase in Iceland's gross national income between 2002 and 2007 . </P> <P> In 2003--2007, following the privatisation of the banking sector under the government of Davíð Oddsson, Iceland moved toward having an economy based on international investment banking and financial services . It was quickly becoming one of the most prosperous countries in the world but was hit hard by a major financial crisis . The crisis resulted in the greatest migration from Iceland since 1887, with a net emigration of 5,000 people in 2009 . Iceland's economy stabilised under the government of Jóhanna Sigurðardóttir, and grew by 1.6% in 2012 . Many Icelanders, however, have remained unhappy with the state of the economy and government austerity policies . The centre - right Independence Party was returned to power in coalition with the Progressive Party in the 2013 elections . In the following years, Iceland saw a surge in tourism as the country became a popular holiday destination . In 2016, Prime Minister Sigmundur David Gunnlaugsson resigned after being implicated in the Panama Papers scandal . Early elections in 2016 resulted in a right - wing coalition government of the Independence Party, the Reform Party and Bright Future . This government fell when Bright Future quit the coalition due to a scandal involving then - Prime Minister Bjarni Benediktsson's father's letter of support for a convicted paedophile . Snap elections in October 2017 brought to power a new coalition consisting of the Independence Party, the Progressive Party and the Left - Green Movement, header by Katrín Jakobsdóttir . </P> <P> 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 . </P> <P> Iceland is closer to continental Europe than to mainland North America; thus, the island is generally included in Europe for historical, political, cultural, geographical, and practical reasons . Geologically, the island includes parts of both continental plates . The closest body of land is Greenland (290 km, 180 mi). 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 mainland of Norway is about 970 km (600 mi) away . </P>

Where is iceland located on a world map