Iceland Deepens Defense Ties with EU Amid Changing Geopolitical Winds

Frostadóttir welcomed the initiative and expressed hope that talks “would conclude by the end of the year”, underscoring Iceland’s eagerness to formalize the partnership soon. This move comes as Iceland navigates a shifting political climate at home and a rapidly evolving security environment abroad, prompting Reykjavík to reassess its longtime stance of keeping the EU at arm’s length.

A New Security Partnership – Independent of NATO, but Complementary

Both leaders stressed that an EU-Iceland defence accord would complement rather than replace Iceland’s existing alliances. The proposed agreement is explicitly independent of Iceland’s NATO membership and its bilateral defence pact with the United States. Iceland has been a NATO member since 1949, despite having no standing army of its own, and relies on the 1951 defense agreement with the U.S. for its territorial defence. Von der Leyen noted that Iceland’s security model has long rested on two pillars: NATO and the U.S. partnership. “Now we are strengthening and adding another layer to your security model,” she said, referring to the EU partnership that will plug Iceland into Europe’s security network without undermining its Atlantic commitments. In practical terms, this means NATO will remain the bedrock of Iceland’s defence, while the EU partnership will target areas NATO doesn’t typically cover – such as civilian crisis response, infrastructure resilience, and cyber defense – thereby enhancing Iceland’s overall security posture in a complementary way.

Indeed, Iceland’s situation is unique: it is the only NATO country without a national military, maintaining just a coast guard and peacekeeping force. For decades it has relied on allied support for defense – for example, NATO fighter jets regularly deploy on rotation to police Icelandic airspace since Iceland has no air force of its own. During the Cold War, the island’s strategic location in the North Atlantic made it a linchpin in Western defences (the famed GIUK gap between Greenland, Iceland, and the UK was a critical chokepoint for tracking Soviet submarines). The U.S. military stationed forces at Keflavík Air Base for decades, and although the permanent base closed in 2006, American Poseidon P-8 patrol aircraft still frequent Iceland amid renewed Russian naval activity in the region. Given this backdrop, it’s clear why Reykjavík is keen to reassure that deeper EU cooperation won’t dilute its NATO obligations. As Iceland’s public broadcaster RÚV underlined, the EU pact will be “independent of Iceland's NATO membership and existing defence agreements with the United States”. In other words, Iceland is adding a European dimension to its security policy, not switching allegiances.

Iceland’s Unconventional Defence Strategy and Its Evolution

Iceland’s decision to pursue an EU security agreement is grounded in its unconventional defence strategy and how that strategy is evolving with the times. As a nation of only ~375,000 people with no standing army, Iceland has historically focused on resilience and civil defence rather than traditional military force. “In Iceland, preparedness is not just a policy, it is a way of life,” von der Leyen remarked, praising the country’s robust search-and-rescue teams and disaster response ethos. This focus served Iceland well during peacetime – the country leverages coast guard patrols, policing by NATO allies, and its remote geography as natural security buffers. But as threats become more complex, Icelandic officials have recognized gaps in areas like cyber defence, critical infrastructure protection, and intelligence-sharing that a closer EU partnership could help fill.

Under the new partnership, Iceland will gain access to the EU’s resources and expertise in addressing “hybrid” threats – a broad term covering cyberattacks, disinformation campaigns, and other tactics below the threshold of conventional war. Critical infrastructure protection is another priority: being a vital node for undersea internet cables and North Atlantic air and sea lanes, Iceland is acutely aware of vulnerabilities to sabotage or disruption. Von der Leyen noted that Russia and China are increasing their strategic presence in the Arctic, right in Iceland’s backyard, which raises the stakes for protecting things like subsea cables and power grids in the far north. She was “impressed” by Iceland’s existing precautions and agreed the EU and Iceland must “work together… to strengthen the protection of critical infrastructure, including subsea cables” against potential attacks. To that end, the EU has already welcomed Iceland into its new secure communications systems – Iceland will participate in the EU’s Governmental Satellite Communications program (GovSatCom) and the IRIS² satellite network, giving the country a backup for secure connectivity in crises.

What the EU-Iceland Security Partnership Will Cover

According to officials, the emerging EU-Iceland security and defence partnership will focus on several key areas of cooperation:

• Hybrid Threats and Cybersecurity: Joint efforts to detect and respond to cyberattacks, disinformation, and other hybrid threats targeting critical systems and society. This includes sharing intelligence and best practices to bolster Iceland’s cyber defences and resilience against hacking or foreign influence campaigns.
• Civil Protection and Crisis Response: Closer coordination in disaster relief, search-and-rescue, and protecting civilians from crises. Iceland would work with the EU’s Civil Protection Mechanism to respond to natural disasters or accidents, leveraging European support during volcanic eruptions, severe weather events, or other emergencies. Cooperation on critical infrastructure protection is a priority, given concerns about the security of power grids, ports, and undersea data cables in the region.
• Secure Communications: Integrating Iceland into EU secure communication networks. Notably, Iceland will join GovSatCom and IRIS², the EU’s secure satellite communications systems for government use. This will ensure Icelandic authorities have access to resilient, encrypted communications and satellite surveillance data alongside EU members – a significant upgrade for a small nation facing big-tech security challenges.
• Joint Defence Projects & Funding: Access to the EU’s new defence investment initiatives, despite Iceland not being an EU member. Von der Leyen confirmed that as part of the deal, Iceland “has access to SAFE, our €150 billion joint defence procurement programme”. The SAFE instrument (Security Action for Europe) is a massive EU fund that provides competitively priced loans to jointly acquire military equipment and technology, boosting Europe’s defence industrial base. Iceland’s participation means it could co-invest with European partners in surveillance systems, air defense, cyber tools, or other capabilities that enhance security in the North Atlantic. Third countries that are close allies – like EEA members and those with EU security agreements – are eligible to join such procurement projects, and Iceland will be no exception.
• Arctic & Maritime Security: Enhanced collaboration in monitoring the High North. With melting Arctic ice opening new sea routes, both Russia and China have shown greater interest in Arctic waters near Iceland. The EU and Iceland plan to share information and strategy on Arctic security, coordinate maritime domain awareness, and possibly conduct joint exercises to ensure the North Atlantic and Arctic remain stable and rule-based. As part of this, Iceland may cooperate with EU initiatives on maritime surveillance or join EU-supported coast guard training programs, complementing its role in NATO’s Arctic posture.

Von der Leyen highlighted that bringing Iceland into Europe’s security framework is mutually beneficial: Iceland gains support in areas outside NATO’s traditional scope, and the EU gains a strategic partner in a crucial geolocation. “This will bring Iceland into Europe’s security and defence network,” she said, noting that the network already includes “eight partner countries, including Norway, the United Kingdom and Canada,” which are working with the EU on defense matters. Indeed, Iceland will be joining a growing club of NATO-aligned nations forging security partnerships with the EU. In recent years, for example, Canada signed a landmark security and defence pact with Brussels – covering cooperation on cyber, maritime, and space security – as a step toward joint weapons procurement under EU programs. The UK, after Brexit, has also been negotiating terms to access EU defense initiatives. The EU’s new SAFE fund is open to close allies who sign cooperation agreements, and the United Kingdom is expected to participate in joint arms procurements through this mechanism as well. Norway, a fellow EFTA state and NATO member, has long collaborated with the EU on defense R&D and peacekeeping missions. By engaging with Brussels on security, Iceland is ensuring it won’t be left on the sidelines as European defence integration accelerates.

Geopolitical Winds Driving Closer Cooperation

Several geopolitical trends help explain why this EU-Iceland defence partnership is happening now. First is the heightened threat environment in Europe. Russia’s war against Ukraine since 2022 has been a wake-up call, shattering assumptions of long-term peace and pushing European nations to bolster defense like never before. The EU, traditionally a primarily economic bloc, has started to take on a bigger security role in response – from funding arms for Ukraine to launching initiatives for joint procurement of weapons. The establishment of the €150 billion SAFE programme in 2025 is one example of how the EU is “strengthening the EU’s overall defence readiness” by investing in military capabilities collectively.

For a country like Iceland, which is militarily small but strategically located, these developments are significant. The North Atlantic has seen greater military activity, with Russian bomber and submarine patrols probing NATO’s northern flank more frequently in recent years (especially after the annexation of Crimea in 2014). At the same time, the Arctic is becoming more contested. “The ice is melting, new realities are emerging,” von der Leyen observed, pointing out that Russia and even China are boosting their economic and military footprint in the Arctic region. This raises concerns about the security of sea lines and infrastructure that connect Europe and North America via the far north. Iceland, as an Arctic state, finds itself at the center of these shifting currents. Closer ties with the EU offer Reykjavík additional tools to navigate this landscape – from joint Arctic strategy discussions to EU investments in Iceland’s monitoring and surveillance capacity. Notably, von der Leyen confirmed the EU will update its Arctic Strategy in coordination with Iceland, aligning policies on issues like sustainable development, military presence, and critical infrastructure protection in the polar north.

Another driver is the realignment of alliances in Northern Europe. In the past two years, Finland and Sweden – the last Nordic countries outside NATO – have both opted to join the Alliance, erasing what had been a security gap in the region. With all Nordic states now inside NATO (or on the cusp, in Sweden’s case) and with the EU and NATO coordinating more closely than ever, the lines between European and transatlantic security are blurring. Iceland’s move can be seen as part of this broader trend: Northern Europe banding together tightly for collective defense. NATO remains the primary shield, but institutions like the EU are adding a supplementary layer of cooperation, especially in peacetime resilience and technology domains. European Commission officials often talk about a “stronger European pillar” within NATO – the idea that Europe should shoulder more responsibility for regional security. For Iceland, engaging with the EU’s defence initiatives aligns with that concept and ensures it has a voice in European security discussions despite not being an EU member (at least not yet).

Lastly, the partnership reflects broader improvements in EU-Iceland relations under a new government in Reykjavík. After some years of cool distance, Iceland’s leadership is once again looking more favorably toward Brussels, both in security and in general policy alignment. In von der Leyen’s words, “Iceland has also entered the European security and defence cooperation” with this agreement – a noteworthy phrase suggesting Iceland is symbolically re-joining the European fold in an area that it had largely left to NATO before. It accompanies cooperation in other fields: for instance, Iceland and the EU just signed a new Memorandum of Understanding on fisheries and ocean management, traditionally a thorny topic, to better coordinate on sustainable fishing and ocean conservation. Given that fisheries were a major sticking point in the past (EU fishing quota rules clashed with Iceland’s interests), this deal indicates a thaw in what used to be a deal-breaker issue. The positive momentum in such areas no doubt makes a defence partnership more palatable to both sides.

Domestic Shifts in Iceland: Warming to the EU

Iceland’s newfound openness to an EU defense partnership is mirrored by a wider shift in the country’s politics and public opinion toward the EU. For decades, Icelanders were famously ambivalent about joining the European Union. The nation enjoyed access to Europe’s single market through the European Economic Area (EEA) and passport-free travel via Schengen, but many Icelanders felt full EU membership might threaten their sovereignty – especially control over rich North Atlantic fishing grounds. In 2009, rocked by a financial collapse, Iceland did apply to join the EU under a pro-European leftist government, seeing the euro and EU oversight as potential stability anchors. However, accession talks stalled over contentious issues like fisheries policy, and when a eurosceptic coalition took power in 2013, they froze the negotiations and formally withdrew Iceland’s EU application in 2015 without holding a promised referendum. At that time, public sentiment had turned against EU membership again, and many believed “Iceland’s interests are better served outside the European Union,” as the then-foreign minister declared.

Today, the tide appears to be turning once more. A new government in Reykjavík – led by Prime Minister Kristrún Frostadóttir of the center-left Social Democratic Alliance – has put Europe back on the agenda in a big way. After winning a snap election in late 2024 on a pro-EU platform, the coalition of social democrats, liberals, and centrists announced its intent to hold a national referendum on EU membership by 2027. “We will have a referendum on the continuation of Iceland’s EU accession talks… no later than 2027,” affirmed incoming Foreign Minister Þorgerður Katrín Gunnarsdóttir, signaling that the government wants the people to revisit the membership question soon. To prepare, the government is conducting a comprehensive review of Iceland’s EU trade relations and even studying whether to adopt the euro in place of the Icelandic krona. Such steps would have been politically unthinkable a few years ago, but they reflect a pragmatic recognition that Iceland’s future may be more secure inside the European project than outside, given global uncertainties.

Crucially, Icelandic public opinion has shifted in favor of closer EU ties. A recent nationwide poll by Maskína (June 2025) found just over 54% of respondents now support joining the EU, with a majority believing that Icelandic households would be financially better off as part of the bloc. This represents a significant swing in favor of membership in a country that historically saw very mixed or skeptical attitudes. For much of the 1980s and 1990s, Icelandic opinion on EU membership was roughly split into three camps – for, against, and undecided – and outright supporters were often a minority. Events over the past 15 years have gradually eroded the old skepticism. The 2008 banking crisis, which devastated Iceland’s economy, first prompted many to reconsider EU membership as a lifeline (hence the 2009 application). Later, Brexit (the UK’s messy departure from the EU) showed Icelanders the costs of losing privileged access to European markets, while also dispelling fears that the EU might be on the brink of unraveling. Additionally, a range of domestic issues – from currency instability (the krona is small and volatile) to a desire for stronger consumer protections and competition – have made the EU look more attractive as a framework to address these challenges. By 2025, over 74% of Icelanders say the question of EU membership should be settled by referendum – indicating a public desire to resolve the long-running debate democratically.

In this context, pursuing a defence partnership with the EU is politically savvy. It allows Iceland to deepen cooperation with Europe in a tangible, results-oriented way without immediately wading into the most controversial issues like fish quotas or euro adoption. Essentially, it’s a step that signals goodwill and alignment with Brussels on common security threats, while Icelandese stakeholders continue to study the pros and cons of full membership. Should the Icelandic people eventually vote “yes” in 2027, the security partnership could smooth the path for accession by having already integrated Iceland into EU defence mechanisms. And even if full membership remains a longer-term or uncertain prospect, the country will still benefit from closer ties in the security realm right away. As Prime Minister Frostadóttir put it, “this is very important for us to show that we can have cooperation on critical infrastructure, civil protection… hybrid and cyber threats” with Europe. In other words, Iceland is demonstrating that partnership with the EU can deliver concrete benefits in safeguarding the nation – a useful example to point to as the domestic EU debate continues.

Toward a More Secure North Atlantic – and a Stronger Europe

The launch of EU-Iceland defence talks marks a new chapter in Iceland–EU relations, and it comes at a time of profound change in European security. If negotiations conclude as expected by the end of the year, Iceland will formalize its place in Europe’s expanding security architecture. Access to EU initiatives like SAFE will enable Iceland to invest in defense capabilities jointly with its European neighbors, perhaps improving equipment for its coast guard or surveillance systems to monitor the North Atlantic. Participation in EU networks will give Icelandic authorities tools to counter cyber attacks or disinformation campaigns that small states often struggle against alone. And working with the EU on critical infrastructure protection and Arctic strategy will help amplify Iceland’s voice in shaping regional responses to strategic threats.

From the EU’s perspective, bringing Iceland on board enhances the reach of European security and defence policy. It extends the EU’s cooperative security zone to the entirety of Northern Europe, plugging a gap in the network of partnerships (since Norway, the UK, and Canada – all important NATO allies – are already cooperating with the EU on defence matters). It also showcases the EU’s openness to “partner countries” in tackling global security challenges collectively. In an era when the line between EU members and non-members is less stark – NATO allies, EU neighbors, and democratic partners around the world are all coordinating more closely – such partnerships are a way for the EU to project stability beyond its borders. As European Council President António Costa said regarding the similar pact with Canada, “While NATO remains the cornerstone of our collective defense, this partnership will allow us to strengthen our preparedness faster and better – to invest more and smarter”. The same logic applies to Iceland: NATO secures Iceland against military aggression, but the EU partnership can help it prepare for 21st-century security risks more efficiently.

There is also a symbolic resonance to this development. Iceland was often characterized as having “one foot in, one foot out” of Europe – deeply integrated in economic and cultural terms, yet formally outside the EU’s political Union. Now, by stepping into EU security cooperation, Iceland is signaling that it stands with Europe not only in values but in tangible action. “With this agreement, Iceland has entered the European security and defence cooperation,” von der Leyen affirmed proudly. She even noted that she expects the negotiations to be swift – “done in a few weeks or months” – reflecting the high level of trust and alignment between Brussels and Reykjavík. Indeed, the groundwork is already laid: as mentioned, Iceland participates in numerous European programs (from Schengen travel to the Horizon research fund to the new fisheries pact). Adding security cooperation cements Iceland’s role as a full-fledged European partner in virtually every sphere except formal EU membership itself.

As Iceland and the EU finalize the details, observers will be watching how this partnership operates in practice. One immediate area to watch is how Iceland leverages the SAFE defence fund – whether it joins in joint purchases of, say, surveillance drones or secure communication gear that bolster its capabilities. Another is whether Iceland contributes expertise to EU efforts, for example by sharing its renowned crisis management know-how or hosting European exercises on its soil (Iceland’s rugged terrain is already used for NATO drills like Northern Viking). The partnership could also potentially pave the way for Iceland’s involvement in EU civilian missions or peacekeeping operations, showcasing its niche strengths such as search-and-rescue or geothermal energy security expertise. In essence, a two-way exchange is envisioned: Iceland receives support and inclusion, and in return it offers its strategic location and specialized experience to the wider European effort.

In sum, Iceland’s decision to launch a defence partnership with the EU underscores how even long-standing security arrangements are adapting to new realities. Faced with cyber threats, great-power competition in the Arctic, and political shifts at home, Iceland is prudently expanding its range of partners. The North Atlantic nation may be small, but it sits at an important crossroads of the transatlantic alliance and the European Union. By anchoring itself a bit more to Europe, Iceland is hedging against uncertainty and contributing to the collective security of the West. Should the Icelandic public endorse full EU membership in the coming years, this defence pact will be seen as a stepping stone on that journey. But even on its own, the partnership will make both Iceland and Europe more secure and more united in the face of shared challenges. As Ursula von der Leyen put it, praising Iceland’s commitment, “You are a strong and reliable ally” – and now that alliance will extend to Brussels as well as Washington.