djnocturnal wrote:I wonder if Keflavik will become active once again?
Iceland: Strategic Air Base for Sale?
November 12, 2008 | 1747 GMT
KARIM SAHIB/AFP/Getty Images
Icelandic President Olafur Ragnar Grimsson
Summary
Iceland’s president offered the strategic Keflavik air base to Russia at a diplomatic luncheon in Reykjavik on Nov. 7, shocking Iceland’s neighbors and apparently surprising even the Russians. With Iceland’s economy in a desperate position, the offer most likely represents an attempt to pressure Western creditors, rather than a move to give the Russians military control of the North Atlantic in exchange for rubles.
Analysis
Icelandic President Olafur Ragnar Grimsson shocked foreign diplomats at a lunch in Reykjavik on Nov. 7 when he said Iceland should offer Russia the use of the former U.S. air base at Keflavik, the Dagbladet newspaper reported. Grimsson added that Iceland needs to make “new friends” on the international scene.
Keflavik is not just any air base. It was absolutely central to U.S. strategy in the North Atlantic throughout the Cold War (and in World War II before that). Washington used Keflavik to keep Russian submarines from entering the North Atlantic, and in World War II it served a critical transshipment point between the United States and Europe; without it, Moscow would have had full and direct access to the open seas via the Greenland-Iceland-U.K. (GIUK) Gap. The United States closed the Keflavik base in 2006.
Iceland’s search for “new friends,” then, represents a sharp departure from the past, to say the least. But then Reykjavik is in dire straits. After being fabulously wealthy for the past decade, Iceland has become the poster child for the international credit crunch — it has seen its entire economy collapse in a matter of weeks, in what amounts to the largest default ever in per-capita terms. With stalled financial transfers — it would be inaccurate to call it all “debt” — standing at 20 times its gross domestic product, Reykjavik is facing the uncomfortable reality that building an international banking empire in an economy of 300,000 people whose only industry is fishing might have been doomed to hit the rocks at some point. Having maximized its exposure to the international financial system, Iceland is now feeling the maximum pain as that system convulses.
In these circumstances, Reykjavik has thrown itself on the mercy of its Scandinavian neighbors and the International Monetary Fund (IMF) to put things right with $6 billion in emergency loans. But given Iceland’s poor — or more accurately, tiny — economic fundamentals, they are (understandably) offering somewhat unfavorable terms. Specifically, the Scandinavians are making their $4 billion in loans contingent on Iceland first getting approval for $2 billion from the IMF.
With its standard of living on the line, however, Iceland (also understandably) is hoping to get a better deal. So while it is certainly true that Iceland needs friends — and possibly even “new” friends as Grimsson said — it may also be that offering a strategic air base to the Russians is simply an attempt to increase Reykjavik’s leverage in its loan negotiations, and not necessarily a push to redefine the entire geopolitical order of the North Atlantic in exchange for rubles.
It is interesting that the announcement was made by Grimsson: The Icelandic president is a ceremonial position and has no control over Iceland’s foreign policy, so he is in no position to follow through on his suggestion. Also noteworthy is the fact that even the Russians appeared to be surprised by the offer — Russian Ambassador to Iceland Viktor Tartarintsev, who was present at the lunch, was quoted as saying that “Russia does not really need the airport.”
As a legitimate offer to Russia, then, Grimsson’s remarks are suspect at best; they are almost certainly a negotiating tactic to galvanize Iceland’s would-be creditors. The Scandinavians, at least, have expressed shock and outrage — which appears to be exactly what Reykjavik (or at least Grimsson) was hoping for