REYKJAVIK, 2 August 2025 — Iceland may be NATO’s most puzzling member: a founding nation of the world’s most powerful military alliance that lacks an army, air force, or military budget of any note. As war again haunts Europe and global tensions rise in the Arctic, this unarmed island is facing one of the most paradoxical questions in geopolitics: Can a nation with no military truly guarantee its defense?
The answer, so far, has been yes—but with growing caveats.
Despite its absence of armed forces, Iceland has remained a committed NATO ally since 1949, relying on its strategic geography, bilateral agreements, and political diplomacy. Positioned in the middle of the North Atlantic, the country offers a critical vantage point for monitoring North Atlantic military activity, especially submarines. Winston Churchill famously warned during WWII, “Whoever possesses Iceland holds a pistol firmly pointed at England, America, and Canada.” That geopolitical importance is still valid. Iceland’s value to NATO comes not from military might, but from location—and in recent years, that value has surged.
A Shifting Global Landscape Redefines Iceland’s Role
With Russia’s war in Ukraine and growing Chinese interest in the Arctic, Iceland is once again at a critical crossroads of great power politics. In response, Reykjavik is adapting—not by building an army, but by redefining how a nation without troops can contribute to collective security.
While Iceland allocated just 0.01% of its GDP to defense in 2024, its government has pledged to “significantly increase” that figure. At the June 2025 NATO summit in The Hague, allies agreed to a new spending target, where 1.5% of GDP would be allocated to “defense-related investments,” a figure Prime Minister Kristrún Frostadóttir has made clear Iceland is seeking to adopt. Frostadóttir, the world’s youngest head of state at 37, has emphasized that Iceland’s strategy is about leveraging its strengths, not abandoning its core principles.
Defense Without Guns: A Unique Model
Iceland’s unique defense model hinges on its civilian institutions and NATO partnerships. The country’s Coast Guard now plays an expanded role beyond patrolling fishing waters, managing air defense systems and supporting NATO surveillance operations. Allied forces also rotate through Keflavik for air policing missions. Spain, for instance, deployed six EF-18M Hornet fighter jets to Iceland for the first time in mid-July 2025, replacing a Czech detachment, as reported by Militarnyi. This highlights the Alliance’s intensified focus on its northern flank.
The United States, which maintained a military base on the island from 1951 until 2006, returned after Russia’s annexation of Crimea. Today, Iceland hosts NATO exercises like “Dynamic Mongoose,” the alliance’s largest anti-submarine warfare drills, which concluded in May 2025 in the North Atlantic. These exercises ensure NATO remains ready to detect and counter undersea threats in this vital GIUK (Greenland, Iceland, United Kingdom) Gap, as detailed by NATO Allied Maritime Command.
Even with these heightened activities, Iceland has not moved toward creating an army. Valur Ingimundarson, a professor at the University of Iceland, notes that military neutrality is a deeply ingrained part of the national identity, and “the idea of an unarmed nation is sacrosanct.” Instead, Iceland is seeking a different kind of readiness through:
- Cyber defense and resilience: Strengthening its national cyber security and actively participating in NATO cyber operations.
- Coast Guard modernization: Investing in specialized equipment like unmanned surveillance submarines to monitor its ports and underwater cables.
- Dual-use infrastructure: Investing in infrastructure that could be accessed by NATO forces if needed.
Leaning Closer to Europe
Iceland is also hedging its bets by leaning closer to Europe. Although not an EU member, it belongs to the Schengen Area and European Economic Area. Prime Minister Frostadóttir recently began negotiations with Brussels on a security and defense partnership similar to the EU-Canada model. This move, officially announced by European Commission President Ursula von der Leyen on July 17, 2025, is viewed as a calculated step to diversify strategic partnerships. It would give Iceland access to EU initiatives like the €150 billion SAFE (Security Action For Europe) joint defense procurement program, and enhance collaboration in hybrid threat mitigation and cybersecurity, as reported by The Reykjavík Grapevine.
Analysts view this EU pivot as a hedging strategy in the event of declining U.S. commitment to NATO, a growing concern under a possible second Trump presidency. Trump’s past actions, including his push to annex Greenland and pressure on allies over defense spending, have motivated Iceland to adopt a more proactive stance on defense matters. Frostadóttir aims to finalize the EU partnership by year’s end and plans to hold a referendum on re-opening EU membership talks by 2027, highlighting a broader shift in public opinion where security concerns are now as influential as economic ones.
The Paradox Persists in a Militarized World
Can a nation without a military truly defend itself? Iceland’s approach offers a unique answer: not through force, but through diplomacy, strategic geography, alliances, and infrastructure. It’s a paradox that has worked—for now.
However, as the world grows more unstable and the Arctic becomes a new front in global competition, Iceland’s fragile balancing act between pacifism and preparedness will be put to the test. Russia’s aggressive actions in Ukraine have led to a fundamental distrust in Moscow and a heightened geopolitical focus on the Arctic from all sides, including China, as detailed in an analysis from the European Parliament. Whether Iceland’s model can survive the next crisis may well determine the future of “defense without arms” in a militarized world.