The Alternative History of Iceland: What if the Nazis had invaded Iceland in World War II?

Iceland had a rather comfortable war, being occupied by the British and later Americans. 

Yet, it was a time that changed everything, the beginning of modernity and Iceland emerged from the war as one of the richest countries in the world. But what if the Nazis had come instead? 

Valur and Jón explore what did happen and what could have.  

Hosted by historians and The Reykjavík Grapevine founders Valur Gunnarsson and Jón Trausti Sigurðarson

Transcript

7. What If the Nazis Had Invaded Iceland?   

On a May morning in 1940, the Icelandic people woke to find a foreign fleet docked in Reykjavík harbour. The impossible had happened in Iceland, just as it had a month before when Germany invaded Norway and Denmark. For over a thousand years, Icelanders could depend upon geography as its best line of defence against foreign invasion. In the first half of the 20th century, this was rapidly changing, due to oil-run ships with farther range, submarines and not least the invention of the airplane. Iceland’s long isolation was about to be broken. But by whom? 

            Of the major powers, the one that showed the most interest in Iceland in the 1930s was Nazi Germany. In 1938, a German glider squadron visited at the invitation of the Icelandic Glider Association. With them they had a single propeller plane which was purchased by the Icelandic government upon their departure. The aeroplane age in Iceland was just beginning.

            In March 1939, the German airline Lufthansa, which was a part of Reich Marshall Hermann Göring’s portfolio, asked the Icelandic government for permission to start developing a landing area for passenger planes. The country was still without an airfield and having someone else pay for it was appealing to the Icelandic national character. Yet, Prime Minister Hermann Jónasson dragged his feet and the request was eventually denied. Storm clouds were already gathering and it was becoming clear that the Germans were interested in the country for other purposes than passenger airlines. 

            One can wonder what could have happened if Iceland had acquiesced to the German offer. But this was hardly a realistic option. Iceland was in the British sphere of influence — if there was a German airfield here, one of the first things the Royal Navy would have done at the outbreak of war was to take it over. Iceland would probably have been invaded already in the autumn of 1939. One could wonder if this would really have changed much, except that the occupation of Iceland would have received more than a passing mention in history books, it being one of the first major actions of the allies during the war. 

            Instead, it was the British who arrived on May 10th, 1940. This happened to be the very same day that the German offensive on the Western Front began which would lead to the fall of France, and also the day Churchill became Prime Minister. The occupation of Iceland was relegated to a footnote in the annals of World War II, but in the country itself it changed everything. The differences would have been even more dramatic had the Germans arrived first. How much of a possibility was this?  

The Battle of Iceland           

In my novel Örninn og fálkinn (The Eagle and the Falcon), it is the Germans who arrive on that May morning. This, however, is unlikely to have occurred. The German navy was still busy in Norway and the army and airforce equally occupied on the Western Front. To tweak things closer to the realm of possibility, I have Norway surrender in two days, as indeed could have happened. The Germans would go on to lose most of their destroyers at Narvik, and their capital ships Scharnhorst and Gneisenau were damaged. Had the battle of Norway not taken place, they would have been a more formidable naval power early in the war. Not enough to take on the Royal Navy, but still…

            A more likely scenario was the plan that was actually drawn up in Berlin. After the fall of France, Hitler wanted to force the British to the negotiating table without the perils of direct invasion. His armies stood in France to the south and in Norway to the west. With control of Iceland (and ideally Ireland too), Britain would have been surrounded and compelled to come to terms. 

To this end, Hitler had the navy draw up a plan to invade Iceland. The admirals did so grudgingly but called the plan “Icarus,” perhaps indicating their faith in the operation. The invasion of Norway had been a success, but this was flying a little too close to the sun. The operation was set to take place in July, by which time the British would already have been in possession of Iceland for almost two months. Nevertheless, due to evens elsewhere, the country was still ill-defended. 

   The main British encampments in Iceland were on Öskjuhlíð hill, later called Howitzer Hill by the Americans, and you can still see some of the bunkers. This would have been the first target for an airborne assault. German paratroopers would have landed somewhere on the outskirts of Reykjavík in the dead of night. Except there is very little darkness in July in Iceland. Perhaps they would have been spotted and the invasion foiled then and there. But let us assume they would have overpowered the British forces as they did in Crete in 1941.

By morning, German ships would have arrived in Reykjavík, in Akureyri in the north and Seyðisfjörður in the east, had they managed to slip past the Royal Navy. Battles would have been fierce but brief, with much destruction wrought, not least in Seyðisfjörður, which was just within reach of German bombers operating out of Norway. It was in fact the only Icelandic town subjected to considerable bombing — the wreckage of a sunk oil tanker is still visible in the harbour.   

            The British troops in Iceland in 1940 were poorly trained and badly armed and would eventually have surrendered, although some might have taken to the highlands to continue the fight in the manner of outlaws of old. The Germans would have taken over the British positions and waited for the inevitable counterattack. They could have been resupplied with ammunition via plane and U-Boat, although only in small quantities, and would have had to requisition food from the locals. This would have made them less popular than the British, who paid with cash. Worse was to come the longer the occupation would have lasted. Had the British delayed and placed an embargo on Iceland with the intention of starving the Germans, this would also have affected the population at large and perhaps led to famine. 

            How the final showdown would go would have been obvious from the beginning. It is rather a question of how much of Reykjavík would be levelled before the Germans gave up against the returning British, supported by warships of every shape and size. What is sure is that the perception of the war would be very changed. Rather than seeing it as a prosperous time when everyone found work with the army, it would instead be remembered as a national disaster when large parts of the country would have been levelled and many would have lost relatives — more like the experience in the rest of Europe. But as a singular event in Icelandic history, bitterness towards the Germans and probably also the British would survive to this day. 

A British Alliance?    

The German invasion never came materialised but a British one did. Iceland, Greenland and the Faroe Islands all lost contact with the Danish motherland when this was occupied on April 9th, 1940. Thus, they became de facto independent but this state of affairs was not to last long. Just three days after the fall of Copenhagen, the British arrived in the Faroes. A month later, they came to Iceland too. Neither of those countries had much say in the matter. And yet there were options. 

            After the German invasion of Denmark and Norway, the British offered Iceland a formal agreement on military protection. John Godfray of Naval Intelligence even suggested that Iceland be admitted to the Commonwealth when the union treaty with Denmark expired in 1943. Héðinn Valdimarsson, Member of Parliament, socialist and head of British Petroleum in Iceland, suggested the same in a newspaper article at the time, although this was seen as treason by some. The British offer of protection was declined on April 11th. What if it had been accepted?

            On the face of it, not much would have changed except the British would have arrived a month sooner than they did. And yet the political consequences could have been considerable. Upon becoming a sovereign state in union with Denmark in 1918, the Icelandic Alþingi declared perpetual neutrality. The British occupation, unannounced as it was, did not really change this policy, leading to protests against foreign military presence throughout the Cold War.  

And neutrality had been quietly abandoned in the summer of 1941. On April 8th that year, the United States occupied Greenland with the consent of the Danish ambassador in Washington but with formal protest from Denmark, itself under German “protection.” Two months later, on July 7th, American troops began arriving in Iceland. Six months before Pearl Harbour, an agreement had been made with President Roosevelt that the United States would garrison Iceland for the duration of the war. The British were eager to use their troops elsewhere (for much of the intervening period, Iceland had in fact mostly been defended by Canadians) and pressed the Icelanders to agree.   

As it happened, there was a lot in this for Iceland, too. The United States was still neutral and so the likelihood of German attack lessened with their arrival. The Americans also came with more money and could devote more attention to defences, not yet being at war elsewhere. The agreement was also a considerable departure for U.S. policy, Roosevelt was reaching farther into the Atlantic though still nominally not at war. Without a formal request from the Icelandic government, he, unlike the British, would not have been able to send his forces as American public opinion at the time would not have accepted invading a neutral country.  

            With the fall of Denmark, some members of Alþingi wanted to declare full independence already on April 10th 1940, even though the agreement with the Danes was set to last until 1943. Had the British offer of protection been accepted, this might have become inevitable. The party most obviously opposed would have been the Socialists, wanting to stick firmly to neutrality as long as the pact between Hitler and Stalin held. But it might have been hard to oppose the nation’s independence, even if it came with the caveat of British protection. Iceland eventually declared independence in 1944 under American protection, but by then the United States was allied to the Soviet Union and the local communists were the most fervent supporters of their presence here. 

Socialist leader Einar Olgeirsson was one of few MPs who wanted to declare war on Germany in March 1945, which was a precondition for joining the United Nations. Sveinn Björnsson, then recently elected as Iceland’s first president, pointed out that it was unclear who would present a declaration of war; himself or parliament? The Constitution was silent on this point. In any case, the president would soon be busy trying to extradite his son, who had been working for German propaganda on the Eastern Front, from prison in Denmark. But perhaps the real reason Iceland stuck to official neutrality until the end of the war is to be found in the words of later Prime Minister Benedikt Gröndal: “It did not seem fitting for Iceland to declare war on defeated countries … Moreover, a declaration of war would make us look laughable.” 

            It is not certain that declaring war on Nazi Germany would necessarily have led to guffaws in the United Nations council at this point and Iceland joined a year later when the war was over. However, some did jest when Iceland flirted with war much later when it became part of the “Coalition of the Willing” during the U.S.-led invasion of Iraq in 2003. In his film Fahrenheit 9-11, Michael Moore portrayed this as Vikings putting out to sea, the footage cut from the 1928 film The Viking.