In geopolitical terms, Iceland is a bit of an anomaly. It gained independence from Denmark, but found itself unable to defend itself. It joined NATO even though it doesn’t have a standing army of its own. It’s crucial to North Atlantic security but is it that crucial?

This article examines Iceland before NATO, and how it, and NATO, evolved together.

The end of World War II

Iceland achieved independence on 17 June 1944¹ after centuries of Danish rule¹. I’m making it sound like they asked for, and got, independence. In reality, the Icelanders took advantage of a lack of communication from Nazi-controlled Denmark to claim sovereignty¹. While it had always been neutral, this was a philosophy it could support because of its geographical isolation. It’s easy to be neutral when no one’s fighting near you. World War II changed the way we fight wars, and the way the world worked. Flying brought countries closer together, and east-west tensions changed the way Europe functioned².

If you look at a map of Northern Europe, you can see that the Soviet Union’s (and now Russia’s) cold water fleet has two ways to get to the Atlantic³:

• Through the English Channel, between the UK and France
• Past Iceland, either between Iceland and Greenland, or between Iceland and the UK.

The first option means that Europe’s two major militaries know what the Russians are up to. The second is the best choice for the Russians if they wish to be stealthier.

This means Iceland’s geography is significant⁴. Whomever controls Iceland controls Russian access to the Atlantic^{2 3}. In military circles, they call this the GIUK gap, or GIUK line, taking the initials from the 3 countries³.

Iceland didn’t have a standing military of its own^{3 5}, and felt it didn’t need one. It had been occupied by Allied forces during the war for a brief time, but they left soon enough³.

The Icelandic situation is clear:

1. Neutral, by tradition
2. No military to speak of³
3. In a strategic geographical location⁴
4. Recent independent

What was the situation in the about-to-be-formed NATO?

North Atlantic Treaty Organisation

It took till 1949 for the Allies to get together and form a collective defensive organisation^{4 3}. I say “Allies” but the original definition of that word included the Soviets during the war. It’s easy to forget they were on our side when we’ve spent 80 years calling them the enemy. What was clear to countries in Europe and North America was that the North Atlantic was a strategic part of the world that needed such a military organisation.

In Europe, the split between East and West was becoming clear with the descent of the Iron Curtain⁶. The tensions between the Soviets and the rest of Europe became clear, especially with the coup d’etat in Prague in 1948⁷

The USA benefited from the war because it established itself as a political and military power. It also had made large loans to European countries during the war which they needed to pay back. (As an example, the United Kingdom finished paying off its World War II loan to America in 2006^{8 9}.) President Roosevelt did not want the US to be dragged into another European war, so America had an interest in making sure Europe was peaceful.

This is where the plan for an American Military Government of Occupied Territories (AMGOT) came from.

One clear basis for peace is trade; two countries that make money off each other will never go to war with each other. Keeping the North Atlantic safe means trade could flow, people can make money, Europe would be safe and American men won’t die on European soil again.

The various countries opted to create NATO. It was obvious that if they needed Iceland if they were to control the North Atlantic – to control the GIUK gap³.

So how did NATO get Iceland to join? Or was it a case of Iceland having to convince NATO to let it in?

Icelandic concerns

Recent independence meant that sovereignty was a large issue at the time¹. At the end of the war, the US had tried to strong-arm Iceland into keeping a military base but locals opposed this, making it infeasible to do so³. Local politics being what they were, Icelanders didn’t want to have foreign military bases on the island. They did want some form of economic assistance because independence wasn’t what it was cracked up to be. They also didn’t have much to offer NATO because what use is a member state without a standing army of its own?

MY PEOPLE ARE UNARMED AND HAVE BEEN UNARMED SINCE THE DAYS OF OUR VIKING FOREFATHERS. WE NEITHER HAVE NOR CAN HAVE AN ARMY… BUT OUR COUNTRY IS, UNDER CERTAIN CIRCUMSTANCES, OF VITAL IMPORTANCE FOR THE SAFETY OF THE NORTH ATLANTIC AREA.

Bjarni Benediktsson, Foreign Minister of Iceland
Speaking at the signing of the North Atlantic Treaty
Washington, D.C., 4 April 1949

But NATO wanted to close the GIUK gap³. The USA was keen to get Iceland on board but the Europeans doubted this would be worthwhile¹⁰.

Without getting into the nitty-gritty of the negotiations, what did Iceland end up getting out of NATO?

Mutual obligations

It’s worth comparing the two entities’ obligations to each other, and see how these have evolved over time.

Iceland’s Obligations to NATO

Iceland spends 0% of its GDP on military¹¹. I’ve mentioned before how it doesn’t have a standing army, and this is one of the side effects of not having a military. It does provide support and hosting for^{2 5}:

• Four radar sites which, together, cover an area the size of Germany¹².
• Air Command and Control System, part of NATO’s integrated air and missile defence system.

While Iceland didn’t have its own military, the USA provided an Iceland Defence Force up till 2006 costing it about USD 260 million per year².

NATO’s Obligations to Iceland

NATO provides Iceland with a full defence guarantee, as it does to all its members. It has responsibility for air and naval patrols in, over and around Iceland. There is no specific dollar amount to this, but it’s clear NATO spends a fair amount.

This is not a bad deal for the Icelanders.

Whichever party is a net beneficiary in this relationship depends on your perspective. With recent geopolitical changes, especially the more pronounced demands from the Trump administration that NATO members pay their share, opinions have shifted¹³.

So what is the relationship between Iceland and NATO like?

The relationship

Like any relationship, Iceland-NATO has had its ups and downs. Some NATO officials refer to Iceland as a “reluctant ally” in private but that’s not always the case. There have been issues that coloured this relationship:

• The Cod wars³. Iceland had disputes with the UK over fishing rights which affected their relationship in NATO. At every step, Iceland threatened to leave NATO and force US troops off the island if they didn’t get their way.
• Anti-NATO sentiment. As with every country, Iceland went through phases of domestic opposition to military in general and NATO in particular³.
• US military presence. Despite their early misgivings, in 1951 the Icelanders let the USA build a military base at Keflavik¹. This was – and still is – controversial on the island. Like other NATO members, Iceland refuses to host nuclear weapons on its territory.
• Surveillance. Iceland’s unique geographical location helped NATO keep an eye on the North Atlantic^{4 3}.
• Contribution. Iceland has been a critical part of NATO’s defence system, especially as part of the GIUK gap^{3 4}.
• Perspective. Countries on the mainland don’t always have the same perspective as islands do¹⁰. As an unarmed member state, it also doesn’t think of issues in the same way as those with standing armies do.
• Cybersecurity. Iceland’s growing tech industry is able to contribute to the cybersecurity domain, allowing it to punch above its weight.

This makes for great reading for any armchair analyst, but why is this important in today’s world?

Pattern analysis

Iceland’s experience is interesting and relevant for the modern world in three key ways:

1. Any island nation state that wishes to join NATO – Ireland? Malta? Cyprus? – will suffer from the “Iceland effect”. NATO will start by thinking of the newcomer as “another Iceland”. It may not be fair, but knowing this means newcomers can tweak their approach to NATO. It also means that the newcomer’s negotiating strategy can start with the Iceland experience in mind.
2. It’s becoming harder to find countries that have zero military, especially with cybersecurity being so important in today’s world. Newcomers would do well to avoid discussion of their lack of a standing army by focusing on their cybersecurity potential which is as relevant today as a soldier with a gun in his hand.
3. While geography was a key factor in Iceland’s membership, the same will not be the case for newcomers¹⁰. Emerging opportunities in the cyber and space domains will change the calculations and is to a newcomers advantage.

If you think these points aren’t relevant, or probable, remember that NATO took on Sweden and Finland a few years back. Given the changes in the geopolitical landscape, and an imperialistic Russia is the big one, it’s not infeasible to think of NATO growing further in the next few years.

References

1. Björn Matthíasson and Valdimar Kristinsson (1999). Iceland | History, Maps, Flag, Population, Climate, & Facts. [online] Encyclopedia Britannica. Available at: https://www.britannica.com/place/Iceland/Modern-Iceland#ref10100 [Accessed 19 Mar. 2025][↩][↩][↩][↩][↩]
2. Kochis, D. (2019). Iceland: Outsized Importance for Transatlantic Security. [online] The Heritage Foundation. Available at: https://www.heritage.org/global-politics/report/iceland-outsized-importance-transatlantic-security[↩][↩][↩][↩]
3. NATO (2025). Iceland and NATO – 1949. [online] NATO. Available at: https://www.nato.int/cps/ge/natohq/declassified_162083.htm [Accessed 19 Mar. 2025][↩][↩][↩][↩][↩][↩][↩][↩][↩][↩][↩][↩][↩][↩]
4. NATO (n.d.). 70 Years of NATO and Iceland: a strong transatlantic bond in an uncertain world – Speech by NATO Secretary General Jens Stoltenberg at the Nordic House, Reykjavik (Iceland). [online] NATO. Available at: https://www.nato.int/cps/en/natohq/opinions_166738.htm[↩][↩][↩][↩][↩]
5. Government of Iceland (n.d.). Government of Iceland | Iceland and NATO. [online] www.government.is. Available at: https://www.government.is/diplomatic-missions/permanent-delegation-of-iceland-to-nato/iceland-and-nato/[↩][↩]
6. Westminster College (2019). Churchill’s Iron Curtain Speech. [online] Wcmo.edu. Available at: https://www.wcmo.edu/about/history/iron-curtain-speech.html[↩]
7. AITOM (2024). [online] Muzeumprahy.cz. Available at: https://www.muzeumprahy.cz/en/education-museum-on-line-on-line-exhibitions-february-1948-in-prague/[↩]
8. Thornton, P. (2006). Britain pays off final instalment of US loan – after 61 years. [online] The Independent. Available at: https://www.independent.co.uk/news/business/news/britain-pays-off-final-instalment-of-us-loan-after-61-years-430118.html[↩]
9. UK settles WWII debts to allies. (2006). news.bbc.co.uk. [online] 29 Dec. Available at: http://news.bbc.co.uk/2/hi/uk_news/6215847.stm[↩]
10. Morgan, J. and Mabry, T. (2018). NAVAL POSTGRADUATE SCHOOL MONTEREY, CALIFORNIA THESIS NO COUNTRY AN ISLAND: ICELAND’S CONTRIBUTIONS TO NATO SINCE 1949. [online] Available at: https://apps.dtic.mil/sti/tr/pdf/AD1065455.pdf [Accessed 19 Mar. 2025][↩][↩][↩]
11. CEICdata.com (2018). Iceland IS: Military Expenditure: % of GDP. [online] Ceicdata.com. Available at: https://www.ceicdata.com/en/iceland/defense-and-official-development-assistance/is-military-expenditure–of-gdp [Accessed 20 Mar. 2025][↩]
12. Smith, A. (2024). Iceland’s NATO Contributions: A Unique but Valuable Role. [online] 24/7 Wall St. Available at: https://247wallst.com/military/2024/09/04/icelands-nato-contributions-a-unique-but-valuable-role/ [Accessed 20 Mar. 2025][↩]
13. Milne, R. (2025). Iceland bid to join EU should not be driven by Donald Trump fears, says PM. [online] @FinancialTimes. Available at: https://www.ft.com/content/a39b613b-4dbc-4a96-997a-89ca160a183b [Accessed 19 Mar. 2025][↩]

Remember: links were correct at time of publication.