Iceland, Russia, and the coming Arctic Ocean smackdown

Iceland has gone bust. But all is not lost. Swimming toward them is. . .a bear! It’s Russia! Vladimir Putin no less, looking as sexy as ever in those bathing trunks of his. Russia is loaning Iceland about the equivalent of a third of Iceland’s GDP, and God only knows what the terms are going to be. I’m sure it’s not going to come cheap, though; although it seems unlikely Russia will get a base out of it (not yet anyway), they’re clearly going to have a lot more maneuvering room in the North Atlantic now.  In fact, it seems that this could become the greatest Russian foreign policy coup since . . .since . . .shit, since Cuba?  Anyone want to help me put this in perspective?

I should also point out that this has occurred despite the fact that the Russian stock market has shut down several times in the last month.  What people often miss, though, is that that stuff doesn’t matter as much over there:  their stock market handles a fraction of their economy, whereas it turned out OUR stock market handled many times our economy’s weight in bullshit assets.  Score one for more primitive markets.  Russia is now able to use its immense foreign currency reserves to stir up additional trouble for a weakening West, and Iceland is the first such move.

It won’t be the last, though.  And Iceland is particularly interesting:  in the Cold War, it was the key to the sea-lanes between the U.S. and Europe; had the shooting started, it would have been essential for the Red Navy to neutralize Iceland in order to cut the supply-lines to NATO forces in Western Europe seeking to resist a Warsaw Pact invasion.  Now Iceland’s geopolitical angle may be a little different.  As global warming keeps on opening up the Arctic Ocean, Russia is getting ever more interested in claiming ever vaster areas of energy-rich seabed.  She planted a flag on the North Pole last year, much to Canada’s chagrin.  (Harper’s comprehensive 07 article on this issue is well worth reading.)  And now there’s even been talk that Canada should invite Iceland to join it, just like it did to Newfoundland back in the 1940s:  after all, Reykjavik is no further from Ottowa than Vancouver.  Someone may yet save Bjork from the bear.

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4 Responses to “Iceland, Russia, and the coming Arctic Ocean smackdown”

  1. Joni Says:

    Interesting times. After living in the shadow of “help and co-operation” pact with former Soviet Union until the collapse. I didn’t see the effects then but now I really don’t wish anything similar on the Iceland.

    Mid you, as far as I know there was something good with that relationship, too. Soviets were quite a large trading partners with us, even though it was largely barter.

  2. David J. Williams » Blog Archive » Bear in the backyard Says:

    […] David J. Williams Autumn Rain 2110 « Iceland, Russia, and the coming Arctic Ocean smackdown […]

  3. Gunnr / Oslo /Norway Says:

    I know the politics in Iceland. I am not surprised they are now talking to Russia. Their economic ties have been for over 50 years.
    NATO and USA left the island for few years ago when it was not in their interest longer . The European and USA did not help Iceland in recent economic crisis. U.K. used new law (the anti-terror law!) against U.K. bank that was owned by the biggest Icelandic bank, Kaupthing that caused the bankruptcy of that bank. Kaupthing was then considered a solid financial institution. The reason by the British government was that another Icelandic bank owned by other people, Landsbankinn was bankrupt. The prime minister Gordon Brown said officially that Iceland was bankrupt and undermined the Icelandic economy.
    In that situation Russia comes and offers financial support and want to discuss further economic ties. In Iceland people are angry. The Icelandic prime minister said: “.. if your old friends betray you, you get new friends.” Now 14/10 a huge delegation from the Icelandic parliament is in Moscow. It would not surprise me that they will discuss Russian oil refineries in Iceland for oil from wealthy oil fields the Arctic.
    I know that people in the fishing industry will welcome the arrival of the Russian fleet to support their fishing boats against U.K. and other European fishery nations. They could let Russia get the big military airport Keflavik. And U.K. could get the pay back they deserves and let Russia get control over the North Atlantic Ocean. That is the mood in Iceland and Reykjavik now. I am deply concern about this.

  4. Forexfires Says:

    Keep posting and I’ll keep coming back, thanks