<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, headed 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, although it is closest to Greenland (290 km, 180 mi), an island of North America . Iceland is generally included in Europe for historical, political, cultural, geographical, 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 . </P> <P> Iceland is the world's 18th largest island, and Europe's second - largest island after Great Britain . The main island is 101,826 km (39,315 sq mi), but the entire country is 103,000 km (40,000 sq mi) in size, of which 62.7% is tundra . About 30 minor islands are in Iceland, 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 km (32--34 sq mi) and Þingvallavatn: 82 km (32 sq mi); other important lakes include Lagarfljót and Mývatn . Jökulsárlón is the deepest lake, at 248 m (814 ft). </P>

Is iceland part of europe or north america