By Daniel Michaels and Benoit Faucon

REYKJAVIK, Iceland -- North America and Europe meet beneath this island, where continental plates collide. Icelanders are trying to balance interests on both sides.

The country of fewer than 400,000 people is an anomaly. A founding member of the North Atlantic Treaty Organization, it has no standing military. Though rooted in Europe, it isn't part of the European Union. Traditionally a fishing island, it has become a tech hub thanks to bountiful geothermal and hydroelectric power.

For decades, Icelanders lived austerely in peaceful remoteness. Their location in the icy waters between Greenland and Norway offered NATO a base during the Cold War from which to monitor Soviet naval traffic, but residents worried little about dangers from warships.

Today, the island, which sits just south of the Arctic Circle, faces growing risks from increased military activity in the high north, as climate change opens once-impassable waterways. Iceland is simultaneously being tugged by growing antagonism between the Trump administration and Europe.

The pressures are evident in Greenland, about 750 miles away, which President Trump has said he wants the U.S. to own. Iceland, which is greener and less icy than Greenland, lacks the vast Danish territory's mineral wealth. Iceland has also long made itself useful to U.S. and NATO defensive efforts -- something administration officials say hasn't happened in Greenland, whose defenses Denmark controls.

When tensions with Russia rose in 2014, U.S. officials told Icelandic counterparts they wanted to restart operations at the decaying Keflavik air base outside the capital, Reykjavik. Iceland quickly agreed and began investing in military infrastructure around the island.

Welcoming the U.S. and other NATO allies is how the country with a population smaller than Wyoming maintains its unique status. The four other Nordic countries -- all of which share land borders with Russia or lie across the Baltic Sea from it -- are ramping up defenses, while Iceland is plotting a different course.

American submarine-hunting planes now routinely patrol surrounding seas from Keflavik, in Iceland's southwest. European NATO jet fighters take turns flying from the base to police skies between Iceland and Russia. And alliance subs and warships call at Iceland's ports.

The U.S. considers both Iceland and Greenland critical to homeland security. Greenland sits along a path that Russian nuclear warheads targeting America could trace across the sky, so is vital to missile detection and defenses. Russian submarines, meanwhile, must run a gantlet near Iceland that NATO calls the Greenland-Iceland-U.K. Gap. Iceland is a high point along the Mid-Atlantic Ridge, an enormous and largely undersea mountain range created by the continental collision. Russian subs, which have recently ventured closer to America, are forced to rise nearer the surface as they cross the ridge, making detection easier.

Now Icelanders are debating whether they need to get more active on defense and whether to restart EU accession talks, which they broke off in 2013. Prime Minister Kristrun Frostadottir plans to hold a referendum on the issue by 2027, once her government has addressed issues she sees as more pressing -- though some Icelanders see Trump's policies as pushing them toward the bloc sooner.

One pressing issue is a national-defense strategy review, now under discussion. Public debate on the topic is important "because military activity has sometimes been under the radar in Iceland," Frostadottir said in an interview. "It's been uncomfortable to talk about."

Iceland, like other Nordic countries, has long tried to keep the Arctic from being militarized. With that no longer possible, Icelanders are assessing what expanded defenses might look like.

"There's never been public support in Iceland for a military, and I don't think there will be in the foreseeable future," said Frostadottir, who took office in late December. "That doesn't mean we can't have active defenses, and that we can't have active alliances, and defenses are important."

Iceland's coast guard, which long existed to protect its fishing waters, is playing a bigger role in defense, including running the Keflavik air base and air-defense systems.

Shaping the debate is Iceland's growing wealth, which the island's geology underpins with both geothermal energy and volcanic activity that draws tourists. Inexpensive green electricity and an openness to innovation have made Iceland a base for industries ranging from aluminum smelting to digital services.

U.S. military ties to Iceland date to World War II, when American forces occupied the island to keep Germans away and used it to resupply the Soviet Union. When Washington launched NATO in 1949, it deemed Iceland's location vital for securing sea lines of communication to Europe and so pulled it into the alliance. U.S. military units defended Iceland from 1951 -- when the two signed a defense agreement that remains in force -- until 2006, when the U.S. pulled forces out to focus on the war on terror.

After the Cold War, Iceland worked to stay relevant inside NATO, sending medical staff to alliance operations in former Yugoslavia and running Afghanistan's main civilian airport. At home, it hosted NATO drills, including an annual exercise on combating improvised explosive devices, which had become a scourge of U.S. and allied troops in Iraq and Afghanistan.

"We could blow up cars up there without anyone complaining," said Jamie Shea, a retired longtime senior NATO official. "The Icelanders were always very keen to demonstrate they weren't free-riders."

Iceland's eagerness to play a role in NATO has contrasted with Greenland, said Liselotte Odgaard, a senior fellow at the Hudson Institute, a Washington think tank. Denmark's military operations on the semiautonomous island have gotten caught between U.S. calls to do more and Greenlanders' desire not to, said Odgaard, who is Danish. Now, under pressure from Trump, Denmark is expanding its military footprint in Greenland, with islanders' consent.

"The neglect of Greenland's defense has put us in a really bad position, " said Odgaard.

Frostadottir said Icelanders are closely monitoring developments around Greenland, with which they have close ties.

Frostadottir, who at 36 years old is among the world's youngest national leaders, heads a social democratic party that supports Iceland joining the EU. Talks on joining broke off during the eurozone crisis a dozen years ago.

Trump's threats to take Greenland, tariffs and antagonism toward Europe have unnerved Icelanders and made Europe seem more appealing to many. Frostadottir, who holds masters degrees from Yale University and Boston University, wants to avoid Icelanders viewing an eventual referendum on restarting EU talks as a choice between Europe and the U.S.

"I do think it's important that even though the security element will, of course, come into it, that we don't scare people into joining the EU, " she said. Others want to move faster. Dagur Eggertsson, a member of Parliament from Frostadottir's party who is active on NATO issues, said that U.S. policy shifts and Europe's more-active international role recently mean the referendum might need to happen sooner.

Write to Daniel Michaels at Dan.Michaels@wsj.com and Benoit Faucon at benoit.faucon@wsj.com

(END) Dow Jones Newswires

Continental plates spread apart beneath Iceland. "The NATO Country With No Military Gets Serious About Defense" at 11 p.m. ET on April 26 incorrectly said they collide.

(END) Dow Jones Newswires

April 27, 2025 04:00 ET (08:00 GMT)

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