“Our time has come!” said Jóhanna Sigurdardóttir, the 66 year-old newly elected Prime Minister of Iceland, who just happens to be the world’s first openly gay national elected leader. Sigurdardóttir served as PM for the last three months in an interim capacity after Iceland’s government collapsed in the wake of the Global Financial Crisis, which bankrupted the small island nation, which had built its economy up in recent years as a freewheeling banking haven. Her election over the weekend is not just a victory for gays and lesbians, but also for women– she is the nation’s first female prime minister and Icelandic newspapers are proudly pointing out that with this election, which sent more women to the Althing than ever before, the nation now ranks 4th in the world for female participation in government. But what challenges face the world’s first openly gay elected leader?

A former airline attendant who became interested in politics by way of unions, presiding on boards of various airline related trade unions before being elected to the Althing in 1978 as a Social Democrat. Much like in the U.S., Iceland has spent the last 40 years becoming increasingly conservative politically and so Sigurdardóttir found herself in the opposition party again and again. In 1994 she ran to be the leader of the party and lost, leading her to say her equivalent of “Change is coming!”, “Minn tími mun koma!” (“My time will come!”).

At the same time, Sigurdardóttir was discovering her own sexuality later in life. After raising two sons with her husband, the couple divorced and Sigurdardóttir began a relationship with Icelandic journalist and playwright Jónína Leósdóttir. In 2002, they were joined in a civil union.

Ingo Sigfusson of Iceland’s public broadcaster, RUV told the BBC that when it comes to the Prime Minister’s sexuality:

“It’s by no means a big deal. It’s been reported, but it’s not something the public is focusing on.. On the one hand, Iceland is a fairly liberal, tolerant country when it comes to homosexuality. On the other hand, she’s never been particularly public about her private life, even though her partner is listed on the parliament’s website. …Whom the new prime minister crawls into bed with at night seems to be fairly far down the list of priorities for people.”

After the economic collapse and the subsequent resignation of the government, the Social Democrats chose Sigurdardóttir to serve as interim-PM because she was so popular with the public, which to American ears, may sound incredible, but even in conservative corners, Iceland prides itself on a progressive social outlook. In fact, many Icelanders calls her “Saint Johanna.”

She’s going to need that popularity now as she guides her country through the worst financial crisis it’s ever experienced. She must find a way to keep her own leftist coalition of Social Democrats, Left-Greens and Independents together while convincing the European Union that it ought to bring Iceland in the fold, which Sigurdardóttir believes is critical if Iceland is to stabilize.

It won’t be an easy sell to Icelanders, however. Beyond the sense of Viking-inspired independence, Icelanders are wary of how EU membership could impact local fishing regulations and as citizens realize that the new-new-Iceland will look a lot like the old Iceland in terms of industries, fishing is once again big business. If Iceland were to join the EU, they would have to give up their territorial fishing rights.

Furthermore, Sigurdardóttir must find a way to make the economy grow again– or at least to find a way to stop the bleeding. Iceland’s economy is expected to contract by 10% this year and 1/3 of the annual budget must go to the International Monetary Fund to begin repaying the $2.1 billion dollar loan it gave the nation earlier this year to keep the country from collapsing.

Perhaps, when looking at all the challenges Iceland is facing, it’s not surprise that the sexuality of the new Prime Minister isn’t only not a big deal, but a point of pride. In so many way, Iceland sees itself regressing back into its own recent past, but in electing an openly-gay woman to serve as their leader, they are showing the world that Iceland can still look to the future.