For decades, Iceland stood as a quiet symbol of what the Arctic could have been: a region where military activity remained marginal, and geopolitical rivalries were held at bay by ice, distance, and mutual indifference. But those days are over. The forces reshaping the world—multipolarity, sharpening power competition, and shifting alliances—have finally breached even Iceland’s volcanic isolation. Reykjavik now finds itself confronting questions it thought it could avoid indefinitely: Should Iceland rearm, deepen its NATO ties, or even reopen its long-abandoned bid to join the European Union?
The short answer is that Iceland will not be allowed to stand still. The new Arctic leaves no room for bystanders. And the longer Iceland clings to the illusion that it can opt out of geopolitics, the more vulnerable it will become to the very forces it fears most.
The proximate trigger for Iceland’s debate is easy to identify. Russia’s war against Ukraine has reignited serious defense planning across Europe’s north, prompting Finland and Sweden to join NATO and turbocharging military modernization in Norway and Denmark. At the same time, Chinese activity in the Arctic—under the guise of “scientific research” and “polar silk road” initiatives—has made clear that Beijing sees the high north not as a global commons but as a strategic frontier. Even in the United States, where Arctic awareness has long lagged behind rhetoric, the Trump administration’s second term has ushered in a new urgency about securing northern approaches to North America. Washington’s revived interest in Greenland, including Trump’s notorious 2019 flirtation with the idea of buying the island outright, signaled that no patch of Arctic territory would remain geopolitically neutral.
Caught in the middle is Iceland: militarily vital, economically exposed, and politically uncertain.
Today, Icelanders are grappling with this reality. Some favor expanding the U.S. and NATO presence at Keflavik Air Base, a Cold War relic that has seen renewed activity over the past decade. Others, still wary of overdependence on Washington—especially after Trump’s tariffs and open disdain for European allies—are floating the once-unthinkable idea of reviving Iceland’s EU accession talks, abandoned in 2013 amid the wreckage of the Eurozone crisis. For the first time in a generation, defense and grand strategy have become matters of public debate in Reykjavik.
Yet much of the Icelandic debate still labors under the delusion that the island has a real choice between “militarization” and “peace.” It does not. That choice was foreclosed the moment the Arctic ceased to be a frozen buffer zone and became a theater of strategic competition.
No serious geopolitical actor sees Iceland as marginal. Moscow recognizes the island’s crucial position on the NATO-Russia seamline—the so-called GIUK Gap (Greenland-Iceland-UK)—through which any Russian naval or air push into the Atlantic must pass. Washington and Brussels see it as a critical lynchpin in defending the North Atlantic sea lanes that would sustain Europe in the event of major conflict. Even China, though not yet a military player in the Arctic, understands the symbolic and logistical value of having friendly access to key nodes like Reykjavik.
In this context, Iceland’s historical policy of minimalism—no standing military, limited defense spending, reliance on diplomatic multilateralism—has run its course. The only real question now is what kind of security arrangement Iceland will embrace: a deeper NATO commitment, a bet on closer integration with Europe, or some hybrid that tries to hedge between them.
From a strategic realist perspective, the case for strengthening the U.S. and NATO presence is obvious. Iceland’s survival has always depended on external guarantees. During the Cold War, it was American power—more than any multilateral process—that kept the Soviet Union at bay. Today, with Russia probing NATO’s flanks and China pursuing influence even in remote regions, that calculus remains unchanged. Iceland cannot defend itself. It must anchor itself to powers that can.
At the same time, Reykjavik’s anxiety about overreliance on the United States is not irrational. Trump’s first term rattled Europe’s northern flank by showing that U.S. guarantees could become transactional and conditional. His second term, while more strategically coherent, has not erased those doubts. In this environment, it is not surprising that some Icelanders look to the EU as a potential ballast—a way to avoid becoming wholly dependent on Washington.
But this, too, is a dangerous illusion. The EU remains a political and economic union, not a military one. Its efforts to project defense power independently of NATO have been fragmentary at best, symbolic at worst. No plausible version of European strategic autonomy exists that could meaningfully defend Iceland in a crisis. Betting on Brussels is, bluntly put, a bet on irrelevance.
The hard truth is that Iceland’s fate will be decided by hard power, not soft power. Geography has placed it squarely in the path of any future Atlantic conflict, whether driven by Russian adventurism, Chinese expansionism, or something yet unforeseen. Its location is not a shield—it is a magnet. The idea that Iceland can sit out the Arctic’s militarization is about as realistic as Belgium sitting out the next great European war.
In this light, the prudent course for Reykjavik is clear: deepen defense ties with the United States and NATO, upgrade the facilities at Keflavik to allow rapid reinforcement, and begin investing—however modestly—in national defense capabilities, perhaps along the lines of Denmark’s flexible, niche-oriented model. Simultaneously, Iceland should continue to leverage its voice in Arctic diplomatic forums to shape norms around military conduct in the region—but without the illusion that diplomacy alone can substitute for deterrence.
This strategy will not be easy. It will provoke domestic controversy, force uncomfortable political decisions, and inevitably expose Iceland to greater risks if major-power conflict does come to the Arctic. But the alternative—drifting without a clear defense posture while pretending that geography and history have changed—is worse. In a more dangerous world, ambiguity is not neutrality. It is vulnerability.
Iceland’s debate today is a microcosm of a larger global trend: the erosion of buffer zones and the return of geopolitical friction everywhere from the Arctic to the South China Sea. Small states that once thrived in the cracks of great power competition now find themselves squeezed and forced to choose. There is no shame in this. But there is great danger in failing to recognize it.
The Arctic is not what it was. Iceland must adapt—or be adapted by others.
About the Author: Andrew Latham
Andrew Latham is a non-resident fellow at Defense Priorities and a professor of international relations and political theory at Macalester College in Saint Paul, MN.
