Well not really, Svalbard is part of Norway. There's some weird laws up there though, as all the signing nations of the Svalbard treaty have the right to conduct commercial activities at Svalbard, but are under Norwegian legislation. And Norway can't collect taxes for financial services there. Or something like that.Could Svalbard be a state?
Svalbard is also not a part of the Schengen agreement, but mainland Norway is.
Since I can't vote for Norway, I will say Iceland. Iceland is awesome, even with their economic struggles and whatnot.