ICELAND: SCENESETTER FOR MARCH 31 DEFENSE TALKS

C O N F I D E N T I A L REYKJAVIK 000107

SIPDIS

SIPDIS

OSLO FOR DATT AND ODC

E.O. 12958: DECL: 03/28/2016
TAGS: NATO MARR PREL PGOV KPAO IC
SUBJECT: ICELAND: SCENESETTER FOR MARCH 31 DEFENSE TALKS

REF: A. REYKJAVIK 85


B. REYKJAVIK 90

C. REYKJAVIK 91

D. REYKJAVIK 92

E. REYKJAVIK 93

F. REYKJAVIK 97

G. REYKJAVIK 98

H. REYKJAVIK 106

Classified By: Ambassador Carol van Voorst Reason: 1.5 (a) and (d)


1. (C) Summary: Since 3/15, when the U.S. announced the
realignment of its force presence at Naval Air Station
Keflavik (NASKEF),the Icelandic government has made its
unhappiness with the decision plain. FM Haarde ) the
government,s key decision maker ) is looking to the 3/31
talks to offer the sort of specificity that will enable him
to tell his party and his public that the Americans are
serious about their commitment to the 1951 Defense Agreement.
Our readiness to offer concrete and credible proposals in
the series of defense talks with Iceland will strengthen
Haarde,s preference (and that of pragmatic bureaucrats and
rising young politicians and other opinion leaders) to seek
continued close security ties with the U.S. Eed summary.

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UNANTICIPATED DECISION
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2. (C) The Government of Iceland is just now coming to terms
with the news delivered March 15 that the U.S. would be
removing its four F-15 fighter jets as well as combat search
and rescue (CSAR) assets from NASKEF. Governing Independence
(IP) and Progressive (PP) Party luminaries seemed genuinely
shocked that the U.S. would take this step without further
negotiations or a long drawdown calendar. There have been a
flurry of party meetings and town hall, meetings with
residents of the Sudurnes region (where the base is located),
and the subject has been discussed in ministerial calls on
Allied foreign ministers (Norway, Denmark, France and
Germany) and Russia,s foreign minister. The Prime Minister
has appealed to the NATO Secretary General. Although there
has been plenty of criticism from the opposition that the
government should have seen this decision coming, the
governing coalition,s complete lack of contingency planning
indicates its leaders assumed they would have much more time
to prepare the country.

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REACHING OUT TO EUROPE
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3. (C) In response to what many interpret as U.S. rejection,
Reykjavik is showing new interest in cooperation with the
Europeans. &I think it is clear that in the future, Iceland
will move closer to Europe and farther away from the United
States on foreign-policy issues,8 PM Asgrimsson told
Morgunbladid in late March. Influential Social Democratic
Alliance Chairman Ingibjorg Solrun Gisladottir said it would
be natural for Iceland to rely for defense cooperation on
countries bordering on the North Atlantic: the UK, Denmark,
and Norway. Haarde himself is building bridges to Europe but
not burning any with the U.S.: he is enough of a realist to
know that European governments are unlikely to offer more
than sympathetic noises, and that any European offers of
defense equipment are likely to be on a purely commercial
basis.


4. (C) At the same time, a current of resentment against the
U.S. has also been flowing (reftels). The sudden
&unilateral8(to repeat a word embraced these past two weeks
by politicians, pundits, and citizens alike) decision, coming
in the course of what ministers had presented to the public
as ongoing negotiations, is being painted as evidence of U.S.
egotism and arrogance ) even by opposition politicians happy
to see the base close, and ordinary citizens with no
particular interest in the base or even the broader concept
of national defense.

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PLAYING CATCH-UP
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5. (C) Only fully independent since 1944, Iceland has little
experience looking out for itself ) or, set in a more
negative light, little sense of answerability for its own
well-being.


6. (C) Some in the Icelandic Government (e.g. FM Haarde and
chief defense negotiator Albert Jonsson) are nervous that the
U.S., with limited strategic interest in maintaining any sort
of presence here, will quietly bow out of the 1951 Agreement
(refs A and D). Others (e.g. PM Asgrimsson and Justice
Minister Bjarnason),feeling betrayed by the style and
substance of decisions already announced, no longer trust us
to meet our responsibilities under the treaty (refs G and H).
A third faction (which we believe includes former PM/FM
David Oddsson as well as other Independence Party stalwarts
of his generation) believes Iceland should react to the U.S.
decision by abrogating the treaty themselves and seeking
security elsewhere in the Alliance (ref D). And then there
is the pacifist left (personified by Left Green Party
Chairman Steingrimur Sigfusson),which never believed the
U.S. was a good mate for Iceland and has been only too happy
to crow, &We told you so8 (ref B).


7. (C). Asgrimsson and Haarde have reacted quite differently
to the U.S. decision, both in public and private. The PM has
strongly criticized the pace and unilateral character of the
U.S. action, expressing skepticism that the U.S. will offer
serious alternatives to a full-time U.S. presence. In
contrast, Haarde (in the job for only a few months, and with
his ego tied less tightly to past government defense policy)
has taken a more measured tone, expressing regret while
focusing on the need to listen with an open mind to U.S.
proposals and seek to maintain the security relationship.
Haarde has been out of the country much of the time since the
announcement, which has resulted in Icelandic media giving
more play to Asgrimsson,s tough talk than to Haarde,s
forward-looking focus.

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GETTING SERIOUS
--------------

8. (C) Within this cacophony is a core of career diplomats
and bureaucrats sincerely interested in a practical
U.S.-Icelandic partnership to confront the challenge of
providing national security in the 21st century. MFA
Political Director Bergdis Ellertsdottir and Defense Director
Jon Egill Egilsson, as well as Justice Ministry Legal
Director Ragna Arnadottir and Coast Guard Director Georg
Larusson, are all serious professionals who know that banging
their fists on tables will not prevent a terrorist attack or
save a drowning sailor.


9. (C) Though the working levels of the ministries have been
kept out of the information loop of late (ref D),they will
be present at the March 31 talks. Some among them have even
told us that they are excited to be present at the
creation,, to have their ideas on defense actually influence
their nation,s program choices as Iceland inevitably
develops a more independent security policy. We anticipate
that their relatively pragmatic and worldly approach will
ultimately prevail, in part because a rising generation of
MPs, local mayors, and other decision makers share their
pragmatic approach to security cooperation.


10. (C) Icelanders, who lived on a subsistence economy until
the last half century but now enjoy one of the world,s
highest standards of living, are above all practical people.
When they face the fact, as they must do soon, that other
Allies are not going to leap in to replace the defense goods
and services thus far supplied by the U.S., they will sign on
for a new, more evenly balanced course of cooperation. We
can make this evolution easier if we:

-- Offer concrete proposals for follow-on security programs,
of the sort now being worked by OSD, Joint Staff, and EUCOM,
that provide a &visible defense presence.8 Exercises,
rotational deployments, and enhanced information/intel
sharing will also make a strong impression.

-- Follow up the March 31 meetings with a series of detailed
proposals responsive to Icelanders, concerns as expressed in
our face-to-face meetings.

-- Remain attentive to domestic political imperatives. The
U.S. decision to keep some CSAR helicopters here until the
middle of September came as an enormous relief to Icelanders
scrambling to arrange for interim and long-term SAR
capability. Justice Minister Bjarnason said March 24 that he
aimed to propose an interim Icelandic SAR plan within three
weeks and a long-term plan within two months. The Icelanders
will be very interested in the information we supply at the
talks on FMS options. Whether or not Iceland decides to buy
American (and it might make sense for them to simplify
maintenance by buying more of the Eurocopter Puma or Dauphins

they already fly),we must be prepared to put forward some
serious options. Continuing our efforts to be helpful to
local base employees who are losing their jobs will also pay
dividends in public goodwill.

-- Initiate public and private links such as the proposed
Burns op-ed and periodic telephone calls. These public
manifestations of sustained USG interest in Iceland,s fate
would smooth the way for a mutually-beneficial follow-on deal.

-- Encourage them to get educated ) and to accept that they
too have responsibilities for security. Even with the U.S.
remaining its defense guarantor, as a wealthy country and
member of NATO, Iceland will have to pay towards its defense,
and its officials will finally need to do their homework on
security affairs so as to be educated consumers. This means
reiterating longstanding offers to welcome Icelanders to U.S.
service academies, war colleges, and the Marshall Center )
but also making clear that other forms of cooperation will be
contingent upon their developing their own security
expertise.

-- Finally, we should remain unruffled by calls for closer
European security ties, making it clear that the U.S. does
not feel threatened by Icelandic calls for closer security
ties with Europe, either in a NATO or EU context. Indeed, we
welcome burden sharing.

VAN VOORST
van Voorst