Spooks, Mercs or Merchants over Iceland?

This is a reprint of a post from Arctic Progress.

KnAAPO-Su-35

Back when Iceland tipped over into financial collapse during 2008 and the UK seized Icelandic banks’ assets using anti-terrorist laws as fig cover, Icelandic President Olafur Ragnar stated that Russia could make use of the Keflavik air base in return for a $5bn loan to the insolvent country. However, fevered talk about Russia gaining a military foothold in the Atlantic, including gaining control over the crucial GIUK gap, didn’t end up amounting to anything concrete.

First, Iceland’s status as a NATO member precluded it from offering Russia a true air base in Keflavik; only something like a refuelling and maintenance depot would be allowed. Second, $5bn is not an insignificant amount of money in its own right, being equivalent to about 10% of Russia’s (official) military budget.

But if things couldn’t be worked out with Russia, a private mercenary company would do. Less Red Storm Rising, more Lord of War. TV station Russia Today mailed me a story by Robert Bridge on how Cash-strapped Iceland to host “private army” – and Russian jets. The company, which has a really slick website (and Twitter!), is seemingly flush with cash. They reportedly paid Iceland $160mn to gain rights to Keflavik airbase and plan to acquire 30 Su-27 fighters from Belarus for use in mock war games. If confirmed, this would make it the largest single order for military aircraft by a private investor.

Nonetheless, questions remain unanswered. Are they “mercenaries or market players“? Is their denial of any connections to foreign governments the truth or a smokescreen? Why is BelTechExport, Belarus’ arms export company, denying knowledge of the Su-37 deal that Melville ten Cate, ECA’s Dutch co-founder, has reported as done to the Financial Times? How can they afford the vast costs of buying an airbase, 30 fourth-generation fighters (unit cost: $30mn), and maintenance without the help of a friendly billionaire or foreign government?

In my opinion, there are two other major possibilities.

  • It’s a front company for Russia’s or China’s intelligence services. They have no shortage of cash – and what better way to learn about NATO military tactics or steal military technology than by organizing war games? Though such an operation would be very deniable, how to make sure that the likes of Melville ten Cate don’t go rogue?
  • It is a US military “black project“. In recent years, there has been growing concern amongst Pentagon planners about the proliferation of Sukhoi Flankers and modern IADS to middle-ranked powers like Indonesia or Venezuela, which is beginning to tilt regional power balances away from Western dominance. Providing training and war games for its allies against Russian hi-tech weaponry would be much in Washington’s interests.

What do you think?

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