Key Points:

• Iceland, with no military, joined NATO in 1949 for strategic North Atlantic importance.
• Despite opposition, Iceland chose Western security over neutrality.
• Crucial for monitoring North Atlantic during WWII and the Cold War.
• With conflicts on the rise the defense sector may seem like a good place to invest, but the smart money is already looking at the next Nvidia as the top stocks to soar in 2025. Unlock details here.

Austin Smith and Michael Muir discuss Iceland’s unique position within NATO, highlighting its lack of armed forces despite being a founding member of the alliance. Michael explains Iceland’s strategic importance, tracing it back to World War II when the British and later the United States occupied Iceland to prevent it from falling into German hands. This strategic significance continued during the Cold War, as Iceland’s location made it a crucial part of the defense against Soviet naval forces in the North Atlantic. Despite its geographical isolation, Iceland remains a vital pivot point in military strategy, much like Taiwan in the East China Sea. The conversation hints at the broader geopolitical importance of such strategically located islands.

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Edited Video Transcript:

I’d like to segue a little bit to Iceland.

You talked a little bit about that.

Why is Iceland missing their target so badly?

You had mentioned it a little bit, but more specifically, what’s the history here?

What’s going on?

Sure.

Yeah, with Iceland, it’s probably one of the most unique members of NATO in that they have no armed forces, but they’re still a really valuable member of the alliance.

Now, to explain that, we need to go back because they were a founding member of NATO back in 1949.

But the explanation really goes back to 1940.

So I imagine some of our viewers will know what happened in 1940 is that at the time, Iceland was in a personal union with Denmark, but Denmark was overrun and occupied by the Germans in a matter of hours.

But Iceland’s strategic position in the North Atlantic was so important that the British launched an invasion of Iceland in 1940 to prevent it from falling into German hands.

It was actually explored by the Third Reich, the possibility of invading Iceland, but ultimately rendered impractical.

But the British couldn’t even tolerate the risk.

To understand that, we go back a little further to some of the sort of the founders of geopolitics as a discipline.

One of the prevailing views was Iceland was essentially the key to the North Atlantic.

It was a German Carl Haushofer, excuse me, who said that basically whoever holds Iceland holds a revolver to the heads of Great Britain, Canada, and the United States.

So we saw that in World War II, where Iceland was a crucial part of the Battle of the Atlantic.

And that was when the German U-boats were launching attacks on Allied shipping.

At the time, Britain was obviously very heavily dependent on external help.

So Iceland was a crucial part of that battle.

The British occupation lasted about 18 months and then the United States took that over.

So that was the position that Iceland was in during World War II.

And then after that, we had a sort of post-war realignment of the world and countries had basically three choices.

The West, the East, or non-alignment.

Now, a lot of Icelanders after World War II assumed they’d return to their pre-war posture, which was one of pacifism and neutrality.

But there were other forces within Iceland who, after the very recent experience of World War II, thought that it would be much better to throw their hand in with the West.

So Iceland did choose to join NATO in 1949, but it’s really important to point out that this was not a universally popular move.

Iceland’s parliament overwhelmingly backed NATO membership, but at the time, there were riots in the streets of Reykjavik on March 30th, 1949, which was when the vote took place.

So Iceland has always had this kind of undercurrent of this goes against our values of neutrality and pacifism, but ultimately, you know, the majority went for the security of the West.

So Iceland’s value during the Cold War was much the same as its value during World War II as the gatekeeper to the North Atlantic.

So if you look at a map, you’ll see that this gap, the two waterways, either side of Iceland, one between Iceland and Greenland and one between Iceland and the UK, not an awful lot can pass through there without Iceland being aware of it.

So Iceland, you know, in the…

Excuse me, in the Cold War, most of the Soviet Union’s naval strength was under the waves rather than above.

So they had an awful lot of submarines.

And Iceland was a really important part of maintaining security in the North Atlantic.

It strikes me, Iceland sort of has the blessing and the curse dynamic of maybe their military pressure because they’re so removed physically, I mean, literally by geography, that they don’t have the same military pressures.

But that same being so isolated out there in the North Atlantic makes them such an important pivot point for military warfare to conduct.

I don’t want to strain the analogy too much, but it reminds me to some extent of the role that Taiwan plays in the East China Sea was acting as this outlier island that can act as an inflection point to China’s benefit or detriment.

But we won’t go down that right now.

That’s an interesting comparison to make.

You consider Taiwan’s value in the Pacific.

But yeah, we could get drawn into that all day.

And maybe we will another day.

Right.

The value of these sort of removed islands, geopolitically speaking.

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