Varða Briefing #3: The Greenland Shock

Hello,

This month’s briefing opens with an analytical note on the Greenland shock and the questions it has made more urgent in Reykjavik: managing the US relationship, locking in Nordic solidarity, and finding shelter as great-power dynamics in the High North spill south. The rest of the edition follows the same arc: a faster Iceland–Germany defence tempo; the new Nordic-Baltic cyber platform; steps toward 24/7 cyber monitoring and response; growing concern over critical infrastructure; and the first interim read-out against NATO resilience baselines.

As in other allied capitals, authorities in Iceland have moved quickly to respond to Trump’s threats to annex Greenland, only to confront the bind now facing many US partners: showing assertiveness while walking on eggshells. The past week has sharpened three questions in Reykjavik: how to manage relations with the US; how to show solidarity with Greenland and Denmark; and, also pressing, though on a longer horizon, how to seek shelter from the accelerating great-power politics of the High North.

In navigating the pull between Washington and Copenhagen, the authorities, like other allies, have worked through their contacts within and around the US administration, harnessing whatever goodwill there is, while publicly praising the strength of security and defence cooperation with the United States, bilaterally and within NATO. In Iceland’s case, that means cooperation around Keflavík airbase, support for US submarine search patrols, US air policing of Icelandic airspace, and references to the long-standing history between the two countries. At home, that line has drawn criticism for showing too much deference at a moment when Icelandic opinion is outraged by the Greenland threats. Yet the external environment makes avoiding unwanted focus from Washington a practical priority, no less pressing than solidarity with Greenland and Denmark.

In an interview with the state broadcaster on Sunday, Foreign Minister Þorgerður Katrín struck the same dual note: continued security cooperation with the US, but a “dismal” turn in the relationship over tariffs and Greenland. “I can’t see friendly nations acting like this, just offloading all kinds of nonsense, unilaterally, onto the other country,” she said. She reiterated that Iceland’s support for Greenland is non-negotiable: “If we did not stand for Greenland’s sovereignty and right of self-determination, we would not be standing up for ourselves either.” At the same time, she argued that the broader focus must remain on NATO’s unity of purpose: “We need, in my view, to hold the alliance together. The threat from the east is still there.”

The working assumption is that measures against Iceland are not on Washington’s radar. Still, latent unease remains. If the rationale for annexing Greenland is to control the strategic approaches to the US, why stop there and cover only one part of the GIUK gap? Iceland does not have Greenland’s mineral riches that might tempt an imperial grab, but it does have the energy capacity to smelt and refine the rare-earth metals from neighbouring Greenland. And in MAGA World, is Iceland, with no national army, any less “undefended” than Greenland? Iceland also once hosted a far larger US military footprint before Washington drew it down. In a re-militarisation scenario, could “ownership” be pushed as the new rationale for a renewed presence, rather than basing by agreement?

Even if speculative, and in some quarters in Reykjavik “hyperbolic”, the parallels feel disconcerting in a moment when little seems off the table. Reykjavik’s sensitivities sharpened further after Politico reported that Billy Long, Trump’s nominee for ambassador to Iceland (not yet confirmed), joked to colleagues that Iceland would become the 52nd US state and that he would be its governor. Foreign Minister Þorgerður Katrín Gunnarsdóttir said she was “not amused” and summoned a representative of the US Embassy to clarify what was said and in what context. Long has since apologised, but the episode underlines how quickly offhand remarks now land as strategic signals. [For nervous comic relief: he still has time to make a better impression than Trump’s last pick for Reykjavik.]

On the other side of the balancing act, Reykjavik has tied itself firmly to the Nordic line on Greenland. Iceland signed the Nordic statement released alongside the European leaders’ statement, which reiterates that “matters concerning Denmark and Greenland are for Denmark and Greenland to decide alone” and frames Arctic security in the language of the UN Charter and international law. Icelandic messaging has paired that position with explicit red lines. Foreign Minister Þorgerður Katrín Gunnarsdóttir has said Iceland would not recognise any change to Greenland’s status imposed against the will of Greenlanders and Danes, and that Iceland would “never permit” an operation launched from Iceland that threatened Greenland. Prime Minister Kristrún Frostadóttir has echoed the same line on social media: “Greenland is part of the Kingdom of Denmark. Nothing about Greenland without Greenland. Iceland stands in full solidarity behind our friends.” Nordic consultations have continued, including before and after the Danish and Greenlandic foreign ministers’ Washington meetings, with Reykjavik staying aligned to the shared message.

This week has also brought a sharper EU-facing push. Þorgerður Katrín made clear she wants to finalise and sign the planned Iceland–EU security and defence framework, after a November signature was postponed amid the dispute over EU safeguard measures on silicon-metal exports from Iceland and Norway. Public detail remains thin on what the framework would contain in practice, including what, if any, specific assurances it would provide beyond cooperation and consultation. She has also said the government will, in line with its coalition agreement, table this session a parliamentary proposal for a referendum on whether to resume EU accession talks, which Iceland discontinued in 2015. If Alþingi adopts the proposal before the ongoing spring session ends (likely June), the statutory window means the referendum would need to take place no later than spring 2027. Before this week’s escalation, polling put 53% in favour of resuming accession talks.

Times are taxing, but the Icelandic authorities are generally effective in crisis: they can move fast and with agility, as the current episode again shows. The harder part is already playing out: the second-order effects and the sustained work needed to manage them. For Reykjavík, the mantra since early Cold War years has been that Iceland’s security rests on two pillars: the 1951 bilateral defence agreement with the United States and NATO membership. The simple question now is how meaningful those pillars remain. Denmark’s bilateral agreement with the US was also signed in 1951; and being in a club where the largest member coerces smaller members makes little sense for a small democratic state.

If those pillars no longer feel solid, a glance at the north circumpolar map shows Iceland’s place in the great-power politics of the High North now leaking into the North Atlantic: a hostile Russia, an increasingly hostile US, a China whose interests and capacities keep growing, and the EU, whose camp in this constellation would include Canada, the UK, Norway, and Iceland. For a small island nation with no standing army, sustaining autonomy and room for manoeuvre in this neighbourhood is a generational task —and the authorities’ recent activities and posture already point in that direction: diversifying partnerships, tightening Nordic alignment, and starting to build more capacity and resilience at home.

German Foreign Minister Johann Wadephul made a short stop at Keflavík on Monday, en route to Washington, and met Foreign Minister Þorgerður Katrín Gunnarsdóttir at his request. The agenda included Greenland (with both sides stressing that Greenlanders decide their own future), NATO cohesion, and practical next steps in Iceland–Germany defence cooperation, including German planned contribution to Iceland’s air-policing [see Berlin’s readout, and Reykjavik’s readout].

After the meeting, Þorgerður Katrín framed Berlin’s northward shift as following: “Germany is taking decisive steps to assume a leadership role in Europe and intends, among other things, to turn more toward the North Atlantic, which is of vital importance for our security and defence, and for Europe as a whole.” She also signalled renewed momentum on an Iceland–EU security and defence partnership, despite a recent silicon-metal trade dispute with the EU that threw a spinner into the emerging discussions.

The stopover reflects increased German interest and a faster Iceland–Germany security tempo: Defence Minister Boris Pistorius visited Iceland in October to sign a defence Letter of Intent that includes plans to station German reconnaissance aircraft in Iceland and use Keflavík to support Germany’s P-8A Poseidon fleet; Germany’s Chief of Defence visited in August; and the two foreign ministers met in Berlin just last month.

Iceland is joining Denmark, Finland, Norway, Estonia, Latvia, and Lithuania in the Nordic Baltic Cyber Consortium (NBCC), with Sweden initially participating as an observer. The group will build a shared platform to exchange information on cyber threats and incidents, expand analytic capacity, and produce joint assessments focused on protecting critical infrastructure—electricity, water and gas systems, and subsea cables. The collaboration will also strengthen links with private companies and research environments and to plug into the EU’s broader cyber network. The project has a budget of about EUR 14 million and is expected to become fully operational within 18–24 months, with implementation planned for 2026–2029.

CERT-IS announced on Wednesday January 14 that it is building a National Security Operations Center to deliver 24/7 monitoring and rapid response to cyber threats, with real-time data feeds, immediate anomaly detection, and a direct link into the Nordic-Baltic Cyber Consortium for information-sharing. The center is under design at the foreign ministry’s premises in Reykjavík and is slated to go live in 2027 with full 24/7 operations by year-end, aligned with EU cyber requirements including NIS2 and the Cyber Solidarity Act. 

A recent Varða-commissioned analysis by the International Institute for Strategic Studies (IISS) urges the authorities to take this a step further: set up the SOC as a formal joint public–private capability from the outset. The IISS case is to build on Iceland’s unusually high trust between government experts and private-sector CTOs and CISOs by bringing critical-infrastructure operators and technology firms into a structured partnership to share data, expertise, and costs. It should prioritise real-time monitoring of critical infrastructure—from energy systems and airports to ports and subsea cables—and also extend the cooperation into operational readiness through joint exercises and training. The aim being to turn a national strength, high societal trust, into a strong security culture, where security is a shared undertaking of government, the private sector, and society as a whole in line with Nordic ‘comprehensive security’ thinking.

Speaking to Iceland’s public broadcaster RÚV, Sólrún Kristjánsdóttir, chair of the Federation of Energy and Utility Companies in Iceland, warned that Iceland is underprepared for “multi-vector” threats against critical infrastructure. She argues Iceland’s exposure is shaped by two forces at once: persistent natural hazards and a Europe-wide shift since 2022 toward more deliberate interference with essential systems, including increased sabotage and attempted contamination of water utilities in the Nordics; Iceland, despite its isolation, could “easily become a target.” Specifically, she calls for much closer public–private cooperation, a shift from reacting to preventing, and clearer plans and accountability: define critical national infrastructure (power, water, district heating, wastewater, telecoms and digital systems), establish legal clarity on who has authority and responsibility when incidents occur, and invest in stronger preparedness and faster recovery—“we need to be much more ambitious”—as serious disruptions are a matter of when rather than if.

The Ministry of Justice and the MFA have released an interim report on Iceland’s civil resilience against NATO’s baseline requirements. This first report covers only one of the seven baselines: continuity of government and essential public services. It finds a strong foundation in civil protection and risk analysis, but notes gaps in cross-government coordination, protection of critical infrastructure, cooperation with the private sector, and prioritisation.

From Varða’s perspective, this is a useful marker that falls short of what implementation now demands. As an interim (“áfangaskýrsla”) report after roughly a year of work, it is the only published document across the seven baselines. Work on the remaining baselines is reportedly continuing in parallel, but progress appears uneven across the track. In that context, and echoing the IISS analysis noted above, it would be of significant benefit if, alongside the ongoing work, the authorities published a baseline of current civil-preparedness and resilience spending, with a three-year trajectory toward NATO’s 1.5% benchmark and clear departmental ownership. The purpose being to provide needed clarity and predictability for ministries, agencies, regulators and companies so planning, investment, coordination and accountability can follow.

Iceland’s Coast Guard has taken delivery of a Teledyne Gavia autonomous underwater vehicle. Officials say it will significantly strengthen monitoring of Iceland’s exposed critical subsea infrastructure, while also supporting search and reconnaissance missions and defence-related tasks in cooperation with NATO. Jónas G. Allansson Iceland’s defense chief said it allows operators to check the seabed and see “whether anything unusual is there and whether something needs a response,” including searching for items placed next to sensitive cables. The AUV can dive to up to 1,000m, typically operates for 6–8 hours, and is manufactured in Iceland.

Separately, Iceland is not part of the Nordic Technical Arrangement on joint drone procurement, signed last October by Denmark, Finland, Norway and Sweden. In a recent parliamentary answer, the foreign minister stated that there are no obstacles should Iceland later choose to join, in part or in full, but noted the initiative is primarily about unmanned aircraft designed for military use; the authorities will, however, follow its progress and whether it creates opportunities to build civilian capability for Icelandic agencies.

If you’ve made it this far, thank you. We’re still adjusting scope and depth, so any feedback on length, focus or missing topics is very welcome – just hit reply! If you are interested in deeper briefings on these or other topics, do reach out.