US security interests in Greenland have parallels to those with neighboring Iceland. Military bases on both islands are key to US needs, and history demonstrates it’s perfectly possible to agree deals with the people living there. The Icelandic experience shows how.
First, the history. In May 1940, British troops occupied Iceland, then a sovereign part of the Nazi-occupied Kingdom of Denmark, to forestall a possible German invasion. They were relieved in July 1941 by US Marines — five months before America’s official entry into the war — who protected this vital staging point for shipping and base for aircraft scouring the Greenland-Iceland-UK Gap for German U-boats.
After the war, Iceland, having declared its independence in 1944, became a founding member of NATO, and in 1951 negotiated an agreement with Washington “on behalf of NATO” for a US military presence centered on the airbase at Keflavik, which became Iceland’s main civilian airport.
It was the first-ever US bilateral defense pact with another state, and Iceland maintained no military of its own. American air units returned to Keflavik in 1951 with the same mission of defending Iceland and keeping traffic moving through the North Atlantic — with the Soviet bloc replacing the Nazis as adversaries.
Icelandic support for the US presence varied over time, and government plans to demand their departure were forestalled by the Soviet invasion of Hungary in 1956. A majority of Icelanders supported NATO membership during the Cold War, but there was less enthusiasm for US forces, especially due to unpopular US wars in Vietnam and Iraq.
Naval Air Station Keflavik (NASKEF) provided significant economic, infrastructure, and security benefits to Iceland, often accounting for nearly 10% of national income and 20% of foreign currency receipts. American search and rescue (SAR) helicopters also frequently helped Icelandic fishermen.
These were useful tools for US diplomats fighting for Icelandic hearts and minds against their Soviet counterparts. When the government in Reykjavik threatened to leave NATO and expel US forces in 1973, a petition to keep the base open garnered 55,000 signatures, about one in four Icelandic adults.
The US appetite for forces in Iceland diminished following the end of the Cold War, and the presence was gradually reduced. In 1996, just four F-15 fighters and their accompanying SAR helicopters remained, but even this required more than 2,000 US personnel and cost hundreds of millions of dollars a year.
The expenditure was increasingly difficult for US planners to justify, with no visible threat and American forces stretched by commitments in Afghanistan and Iraq, and in 2005, Washington began cost-sharing discussions with the Icelandic government. It soon became evident that those negotiations would not be successful, and in March 2006, George W Bush’s administration announced a unilateral decision to close the base at Keflavik.
Prime Minister Halldór Ásgrímsson grumbled that the decision constituted a “breach of trust,” but by June, he was out, and new Prime Minister Geir Haarde focused on negotiating a rapid base closure and ensuring continued US and NATO support for the defense of Iceland. For their part, the Americans wanted to keep open the option of reactivating the base if the strategic situation changed.
The Icelandic economy was then in the midst of a heady financial boom, which softened the blow of job losses at the base, and local Mayor Árni Sigfússon asked his German counterparts for tips on how to find investors to repurpose former base infrastructure after the departure of US forces.
Two fundamental issues needed creative resolution: how to split the costs of closure and how the US and NATO allies would defend unarmed Iceland.
Financial discussions centered on the amount the US would claim for the residual value of the sprawling complex — everything from barracks and warehouses to deep shelters — and Reykjavik’s request for compensation for environmental damage.
In the end, the two sides agreed to zero out these competing claims, and the base changed hands at no cost to either side under a bilateral transition agreement. Iceland took responsibility for early warning radar and maintaining some host nation support for NATO’s needs, while other facilities were converted to civilian use.
The American flag came down in September 2006. Prime Minister Haarde took some heat from the parliamentary opposition for not taking a tougher line on environmental remediation, but overall the transition was smooth.
Within hours of NASKEF’s closure, Russian long-range reconnaissance bombers flew close to Iceland’s coast. If Moscow’s intent was to intimidate Reykjavik or drive a wedge between allies, it failed; the main effect was to expedite new coordination procedures. These included the establishment of a small interim military staff at the US Embassy in Reykjavik and the dual-accreditation of the US Naval Attaché in Oslo to cover Iceland.
Within days of the base closure, the amphibious assault ship USS Wasp paid a high-profile port call to Reykjavik, highlighting the ability of Washington to respond to a military threat or natural disaster. A thousand sailors did their best to make friends and exhaust the Icelandic capital’s beer supplies.
The centerpiece of the new arrangement was a NATO Air Policing system agreed by the North Atlantic Council in 2007. Ever since, allied nations have periodically deployed fighters to Keflavik, broadening responsibility for the defense of Iceland and its surrounding airspace.
Following Russia’s 2014 invasion of Ukraine and a surge in Russian submarine capabilities, the US began regular deployment of P-8 maritime patrol aircraft to Keflavik, with Iceland providing host-nation support. The UK has also deployed P-8s, and Germany has discussed doing so in the future. While no longer operating a permanent base, the US has a continuous rotating presence, and has invested significantly in facilities at Keflavik, which has reemerged as a critical operating location.
Some Icelandic observers believed Reykjavik should have been able to forestall the complete closure of NASKEF, but they underestimated the pressure on US departments to free up resources for the “War on Terror,” as well as growing US frustration with Iceland’s reluctance to contribute meaningfully to operating costs.
Unilaterally closing NASKEF removed US leverage for future deployments, making them dependent on ongoing agreement from Reykjavik. Ambassador Robert G. Loftis, State Department Senior Advisor for Security Negotiations and Agreements from 2004 to 2007, later told an Icelandic newspaper it had been short-sighted. But the continued ability of US and other NATO forces to deploy to Iceland without the overhead of a permanent base shows the American negotiators achieved their overall goal.
The growing strategic importance of the Arctic, especially for NATO, only adds to the strategic utility of Iceland. Prior to NASKEF’s closure, the alliance had essentially subcontracted the defense of Iceland to the US, but NATO Air Policing has demonstrated the practical benefit of collective defense and sends a signal it will support its smaller members. NATO’s Arctic Sentry program, announced last month, has now put Iceland into a larger Arctic security context for the alliance.
Collective defense is the foundation of NATO, and the allies have always accepted that larger states — not just the US, but Britain, France, Germany, and recently Poland — are expected to assist smaller nations, even as all members continue to be exhorted to share more of the burden, culminating in the 5% spending pledge at the Hague Summit last year.
Different members of NATO can contribute in different ways. During the negotiations on Iceland’s post-NASKEF defense, there was no suggestion that the country needed to build its own ground forces or fighter squadrons. There was, however, an expectation that it would perform the tasks it could, including maintaining the downsized base and air defense radars. This mirrors demands placed on other NATO allies, such as the frontline Baltic states, which are likewise not required to acquire fighter aircraft.
Despite the imbalance, US negotiators treated their Icelandic counterparts as partners, not free-riders or charity cases. They wanted Iceland to feel assured that Washington still had its back and would be there if a threat re-emerged. It seemed a good bet that the US, Iceland, and other NATO governments would remain fundamentally aligned on North Atlantic security.
The recent aggressive tone toward Denmark and Greenland may well have made Icelanders less receptive to the idea of a permanent US presence, and further escalations in rhetoric may endanger the defense relationship entirely. Interestingly, Iceland is to hold a referendum this year on reopening EU membership talks.
The Trump Administration has suggested that a nation’s sovereignty is tied to its ability to defend its territory unilaterally, and has specifically challenged the legitimacy of Greenland’s position under the Danish crown. Were these assertions to become formal US policy, it would herald the death of NATO in its present form.
Philip Kosnett represented the United States in Europe, the Middle East, and Asia during a Foreign Service career working at the intersection of diplomacy, development, and defense, including as Ambassador to Kosovo and Chargé d’Affaires in Turkey and Iceland. He now consults, writes, speaks, and designs games on global affairs, including as an affiliate of the Center for European Policy Analysis (CEPA) and the Global and National Security Institute (GNSI). He is the editor of “Boots and Suits: Historical Cases and Contemporary Lessons in Military Diplomacy” (Marine Corps University Press, 2023).
Erlingur Erlingsson is a Senior Visiting Fellowat the Institute of International Affairs (IIA) at the University of Iceland. A former Icelandic diplomat, he served as Deputy Chief of Mission in Washington D., Iceland’s National Liaison Representative at NATO’s Allied Command Transformation, and was part of the ministry’s Directorate for Defence during drawdown talks for Naval Air Station Keflavik in 2006. He was previously a Visiting Fellow with the Center for Transatlantic Relations, at Johns Hopkins University Paul H. Nitze School of Advanced International Studies (SAIS).
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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