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One year ago, the world's accusatory eyes were on Iceland.

Already the focus of a debt dispute with Britain and the Netherlands that arose from the 2008 collapse of the Icelandic banking sector, the eruption of Eyjafjallajökull spread a cloud of volcanic ash across Europe that grounded flights throughout the continent, stranded hundreds of thousands of travellers, cost the international airline industry 1.4 billion Euros and resulted in the greatest air travel disruption since the terrorist attacks of September 11, 2001.

Following 18 months of relentlessly depressing news coverage about the economic collapse, the eruption may have been the best thing to ever happen to Iceland.

"People were ready for something new to hold their interest, and nothing holds the interest of an Icelander like geological activity," Gunnar H. Jonsson, a journalist with the Icelandic National Broadcasting Service, wrote shortly after flights resumed in late April. "This was not a catastrophe but a national event that oddly seemed to be bringing people together and burying coverage of the financial meltdown under a metaphorical layer of ash."

While the volcanic eruption did hurt some of the country's most productive agricultural lands, Iceland's President Olafur Ragnar Grimsson told the BBC World Service that in balance, it opened up an interest in Iceland that resulted in one of the best tourism years ever.

"Of course, we've had better years," the President said. "But on the whole, 2010 has turned out to be much better than we thought this time a year ago."

The economy is still decidedly grim for locals -- unemployment in Iceland currently stands at around 7% -- but the sharp devaluation of Iceland's currency, the krona, has made the previously expensive country much more affordable for visitors. The first months of 2011 already saw a 12% percent increase from 2010, and Iceland expects to have more than a million tourists in 2016.

So go now to beat the crowds.

The belle of the ball
Many travellers flock to Iceland's countryside, in search of geysers, glaciers and other geological wonders, but day-to-day life can best be seen in Reykjavík, the capital, where 75% of the country's population lives. No longer a sleepy fishing village, not yet a bustling metropolis, the city itself is on the brink of transformation.

On May 4, Iceland's first full-scale concert hall, Harpa, will open in Reykjavík, with three days of performances by the Iceland Symphony Orchestra. The building, with a stunning glass façade designed in collaboration with the Danish-Icelandic artist Olafur Eliasson, is part of the city's extensive Eastern Harbour development project, aimed at connecting the area with the city centre.

Just steps away, nestled in a formerly desolate complex of fisherman's huts, is Saegreifinn, a legendary restaurant that serves the best lobster soup in Reykjavík. A throwback to the harbour before revitalization began, diners sit on stools made from fish-packing barrels and eat with plastic utensils on tables made from wooden planks. Remnants from past seafarers decorate the walls and hang from the ceiling.

If you are in the mood for a quicker bite, grab a hot dog from the Bæjarins beztu pylsur food truck (Tryggvagotu 10, translates to "the best hot dog in town"). The specialty is served with ketchup, sweet mustard, fried onion, raw onion and remolaði, a mayonnaise-based sauce with sweet relish. Take it to go and stroll down Laugavegur Street, lined with Danish-inspired design stories. Stop by Arctic Photo to peruse incredibly beautiful photos of the Icelandic landscape. (Shopping tip: bring a calculator; the conversion rate defies easy multiplication in your head.)

As summer (and increased daylight) approaches, Icelanders will flock to the cafes in downtown Reykjavík. One of the newest is Laundromat, a Danish franchise that offers brunch, burgers and beer alongside self-service laundry machines (the only ones in the city). For travellers with children, there are playrooms with special staff to watch the kids while the parents drink a Pære Cider.

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