The Varða Briefing #1 - Iceland’s New Security and Defence Policy

Hello from Reykjavik,

As part of the Varða Project, we’ll share periodic updates for our English speaking friends on security and defence developments here in Iceland.

We’re piloting this format and would welcome your feedback on that would make our briefings more useful to you.

Varða co-hosted an event with Brooks Tech Policy Institute at Cornell University on strategic simulations for Iceland during Arctic Circle Assembly week. The event was invite-only and under Chatham House rule, and we shared out this summary following the event.

Iceland’s first security and defence policy has moved from a cross-party report presented in mid-September to a parliamentary resolution tabled by the Minister for Foreign Affairs. The report set out the policy; the resolution carries it forward with minor, non-substantive edits.

In an attempt to secure a durable consensus and keep security and defence from becoming a political football, the minister mandated representatives from all parliamentary parties to draft the policy. This choice partly ceded control and relied on leveraging Iceland’s high political trust.

The approach largely held: of six party representatives, only the Center Party’s eurosceptic delegate resigned, citing concerns about EU drift and questioning the exercise. The remaining parties have stayed engaged.

The new policy consolidates ongoing work and effort of the authorities into a Parliament-backed framework and, for the first time, formally records the government’s threat assessment and investment commitments. It does not change Iceland’s security posture; it makes explicit what had been assumed.

We won’t dive into details yet, but a few points are worth noting:

No Icelandic armed forces. The report reaffirms that Iceland is, and will remain, a country without armed forces. The cross-party group said the “army question” was considered but set aside on effectiveness grounds: other security investments would deliver more for Iceland. In public comments, members added that senior NATO generals advised against creating a national force and urged Iceland to focus on capabilities that strengthen allied operations. Net effect: stick with the alliance-based model and invest in enablers at home rather than build a small, costly force with limited return. This point was echoed by PM Kristrún Frostadóttir at the recent Arctic Circle Assembly, where she said she “hoped there wouldn’t be an Icelandic armed forces during her lifetime.”

Alliance-first, maintain anchors, expand cooperation. NATO and the 1951 U.S.–Iceland Defence Agreement remain fixed anchors; the authorities aim to deepen practical cooperation within these frameworks. Expansion centres on the Joint Expeditionary Force (JEF), Nordic defence formats, and targeted bilateral ties with key allies (Nordics, Baltics, UK, France, Poland, Germany, Canada). The report does not mention the EU, but European Commission President Ursula von der Leyen’s visit earlier this summer culminated in an announcement to open talks on a possible EU–Iceland defence and security partnership .

Reception: high visibility, limited criticism (so far). The draft policy led the evening news and drew multi-article coverage across outlets. With the Left-Green Movement—the principal anti-NATO voice—absent from Alþingi after the last election, pushback on NATO/U.S. cooperation looks unlikely. The reason behind Center Party’s withdrawal became clearer when MP that resigned from the group issued her individual Security and Defense Policy resolution, highlighting differing opinions when it comes to the internal agency structure of Iceland’s security apparatus.

Limited engagement with researchers, mirrored by underinvestment. The report lists meetings mainly with ministry officials, NATO staff, and senior officers; academics, think-tank staff, and policy researchers were notably absent. That omission partly reflects chronic underinvestment in analytical and research capacity outside government. The report repeats previous calls for strengthening this capacity, but delivery to date has been incremental at best.

Next steps. The parliamentary resolution is now on the docket and will likely be formally introduced the week of Nov 3. Following the introduction it will pass to the Foreign Affairs committee before being discussed and likely passed before Christmas recess. We’ll share Varða’s submission in the next briefing.

At the EPC summit in Copenhagen (2 October), PM Kristrún Frostadóttir co-chaired a leaders’ roundtable on economic security, arguing to keep EU–non-EU trade open and to “look north” with investment in North Atlantic connectivity—subsea cables, ports, aviation links, logistics corridors. With Greenland, the Faroe Islands, and Germany’s chancellor at the table, the line-up underscored Iceland’s role as a practical northern connector in Europe’s supply chains.  Commenting on the meeting to Icelandic media, the PM said she wanted Iceland to have a leadership role in shaping commerce and defense in the Arctic. She later told Icelandic media that Iceland should take a leading role in shaping Arctic commerce and defence.

Days later in Nuuk, Frostadóttir and Greenland’s Premier Jens-Frederik Nielsen agreed to accelerate preparatory work on a bilateral trade agreement. Their joint statement (pdf) highlights free, unhindered North Atlantic trade and practical connectivity projects (including subsea telecom cables), with ministries tasked to advance the work. In Iceland–Greenland relations, the emphasis has shifted from the broad declarations of the past with slow follow-through, to a more operational agenda focused on connectivity and logistics.

On 19 October in Reykjavík, Foreign Minister Þorgerður Katrín Gunnarsdóttir and German Defence Minister Boris Pistorius signed a Letter of Intent (pdf) to deepen defence cooperation. Speaking to Icelandic media, Pistorius said: “As for Iceland, we want to deepen our cooperation. We will increase our presence.” He also stressed Germany is “ready to take on more responsibility for stability and security in the High North.” Berlin’s readout adds that German reconnaissance aircraft will be stationed in Iceland and that Keflavík will support the new P-8A Poseidon fleet.

Two weeks earlier in Helsinki, on 7 October during Iceland’s presidential visit, Iceland signed a non-binding MoU (pdf) with Finland which gives the allies a way to work together now that all Nordics are inside NATO. Rather than add new structures, it aligns how the two governments plan and operate. In effect, the MoU adds cadence to Reykjavík’s alliance-first, Nordic-forward approach: prioritising interoperability and shared situational awareness with close allies. It carries no automatic spending and activities will be approved case by case at the national level.

A recent Gallup poll shows rising perceived spillover risk from Russia’s war in Ukraine: over 70% of Icelanders now judge wider conflict likely (51–63% in Feb–Mar 2022), while roughly one in ten call it unlikely (20–26% then). Forty-four percent expect major personal impact, and just over one-quarter expect little or none. Women are more likely than men to foresee wider conflict (76% vs 69%), and respondents with more education and higher household income are more likely to expect both spillovers and significant personal impact on their lives.

This op-ed by Foreign Minister Þorgerður Katrín Gunnarsdóttir was published in Morgunblaðið and translated by AI for your convenience.

It is natural to ask why a specific defense policy is needed. The answer lies in the changed security environment now facing Europe and the North Atlantic.

Russia’s invasion of Ukraine in 2022 was a watershed moment. It changed our worldview. For the first time since the end of World War II, Europe faces a large-scale war of conquest where internationally recognized borders are being ignored.

The greatest threat we face is the same as that facing other NATO allies: a military threat from Russia. Iceland’s location means that our country would, almost inevitably, be drawn into any major conflict that might erupt in Europe. Iceland’s geographic position is crucial for surveillance and control of aircraft, ships, and submarines in the North Atlantic — vital for the defense of both North America and Europe.

At the same time, we face new kinds of risks — so-called hybrid or multi-domain threats — such as sabotage of critical infrastructure, cyberattacks, and efforts to spread fear or erode public trust. Recent incidents in Europe, where drones have violated airspace, disrupted air traffic, and flown over military installations, illustrate this threat.

This new security reality led Denmark to decide, by an overwhelming majority, to participate fully in the EU’s defense cooperation. Finland and Sweden — both formerly neutral states, with Sweden having remained so since the Napoleonic Wars — joined NATO. We Icelanders must also reassess our approach to defense and security.

Iceland is without a military, but by no means defenseless. Through our NATO membership, we enjoy the protection of our allies, and through our 1951 defense agreement with the United States, we receive the protection of the world’s most powerful military. These are the main pillars of our defense policy, and all its components are aimed at supporting and strengthening Iceland’s participation in NATO.

We do this, for example, by expanding regional and bilateral defense cooperation within the Alliance framework — as we have recently done through declarations of intent with Finland and Germany. I can also mention Nordic defense cooperation (NORDEFCO), the Joint Expeditionary Force (JEF), and closer collaboration with key allies such as the UK, France, Canada, Germany, and the EU.

Our cooperation with the United States on defense and security has probably never been closer or stronger than it is now. I sometimes encounter the misconception that cooperation with our Nordic and European neighbors somehow weakens our ties with the U.S. Quite the opposite is true. The United States supports and welcomes Iceland’s deeper cooperation with neighboring allies — all of whom are NATO members — and also welcomes Europe’s growing role and responsibility in its own defense, where the EU plays a significant part.

We must not forget that NATO’s mutual defense commitments are reciprocal. Our allies help us, and we help them. Iceland must be — and is — a reliable and trusted ally, contributing both to its own security and to that of the Alliance.

Our most important contribution to collective defense is the facilities we provide for allied forces in Iceland. It has been nearly two decades since Iceland assumed responsibility for managing the defense areas previously operated by the U.S. military. This includes, for example, the operation of NATO’s command center at Keflavík Airport and the Icelandic Air Defense System, which monitors airspace for NATO.

So-called Host Nation Support is another vital contribution — receiving and servicing allied forces when they come to Iceland, for instance, for anti-submarine patrols or NATO air policing missions.

NATO’s defense plans, along with Iceland’s own and those of the United States, require us to strengthen our national preparedness and response capacity. This includes increasing society’s ability to withstand shocks, and reinforcing infrastructure that serves both daily needs and crisis situations. It is essential to strengthen domestic response capabilities — especially the National Commissioner of Police, the Coast Guard, and the national cybersecurity team CERT-IS.

We are proud of our excellent civil protection system and its unique ability to respond to natural disasters. We must also enhance our resilience to human-made crises — ensuring the security and accessibility of energy, telecommunications, transport, medicines, food, and water, among other essentials.

We must not forget that one of the main preconditions for strengthening Iceland’s long-term security and defense is developing the necessary human capital, experience, and expertise within Iceland.

The cross-party cooperation among MPs in shaping this defense and security policy was exceptionally good. The contribution of the Centre Party’s representative was also valuable, even though the party did not endorse the final report. Ahead lies a discussion in Parliament and society on this policy, which I trust will be informative and substantive. This is a matter of Iceland’s security — and that of all Icelanders.