VZCZCXRO1579
OO RUEHAST
DE RUEHRK #0357/01 2700733
ZNR UUUUU ZZH
O 270733Z SEP 06
FM AMEMBASSY REYKJAVIK
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2979
INFO RUEKJCS/SECDEF WASHDC IMMEDIATE
RUEHNY/AMEMBASSY OSLO IMMEDIATE 0257
RUEHNO/USMISSION USNATO PRIORITY 0229
RHMFISS/HQ USEUCOM VAIHINGEN GE PRIORITY 0032
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 02 REYKJAVIK 000357 
 
SIPDIS 
 
SENSITIVE 
 
C O R R E C T E D  C O P Y  (PARA NUMBERING) 
 
SIPDIS 
 
DEPT FOR P (BAME), EUR/NB (MIDDLETON, MAHER), EUR/PPD 
SECDEF FOR OSD/RA (COSTA), OSD/P (KELSO, HURSCH) 
OSLO FOR DATT 
 
E.O. 12958: N/A 
TAGS: MARR PREL PTER KPAO NATO IC
SUBJECT:  Iceland Defense Talks: PM Unveils Agreements for the 
Public 
 
REYKJAVIK 00000357  001.4 OF 002 
 
 
¶1. (SBU) Summary:  Iceland's Prime Minister Haarde presented the 
results of the last six months of U.S.-Iceland defense talks to his 
political opposition, the parliamentary foreign affairs committee, 
and the nation in meetings and an hour-long televised press 
conference September 26.  Haarde - with the leader of the minority 
party in the coalition government by his side - described the 
provisions of the "Technical Agreement" to close Naval Air Station 
Keflavik and the "Joint Understanding" describing the way ahead in 
the bilateral security relationship, as well as a list of new 
Icelandic government initiatives on security issues.  The opposition 
has yet to respond forcefully, perhaps intimidated by the breadth 
and depth of the defense framework Haarde has presented. 
 
¶2. (SBU) Following the PM's announcement, Ambassador gave interviews 
to key Icelandic media, the first step in a rollout campaign to 
affirm America's continuing commitment to Icelandic security and our 
intention to help Iceland develop (through, e.g., exercises, 
training, and defense industrial cooperation) the capability to 
contribute more to its own security.  That the GOI also unveiled 
some initiatives of its own - including a strategic studies think 
tank - reinforces our view that Haarde's government is now ready to 
break with Cold War-think and look seriously at how it can do its 
part to protect its people from contemporary threats.  End summary. 
 
¶3.  (SBU) During the last round of U.S.-Iceland defense talks in 
Washington September 14, both sides were able to reach agreement on 
a technical agreement for the closure of Naval Air Station Keflavik 
(NASKEF), a political "Joint Understanding" on the way forward for 
defense relations, and amendments to certain classified annexes to 
the original 1951 Defense Agreement between the U.S. and Iceland. 
Prime Minister and Independence Party head Geir Haarde met with 
opposition party members and the Althingi (parliament) foreign 
affairs committee on 26 September to brief on the substance of the 
agreements.  Haarde followed this at the end of the day with a 
pre-announced, nationally-broadcast press conference. 
 
¶4.  (U) In his hour-long press conference, Haarde - joined as in the 
other meetings by his junior coalition partner, Minister of Commerce 
Jon Sigurdsson of the Progressive Party, stepping in for the absent 
Foreign Minister - proclaimed himself satisfied with the results of 
the negotiations and affirmed that there was no fundamental change 
to the terms of the 1951 Agreement.  He noted that he had spoken to 
U/S Burns earlier in the day to confirm that all the details were 
taken care of on the U.S. side, and said Foreign Minister 
Sverisdottir and an appropriate official on the USG side would sign 
the Technical Agreement within the next few days.  Haarde said he 
and the Foreign Minister will travel to Washington to sign the Joint 
Understanding in the next month. 
 
¶5.  (SBU) Haarde also unveiled a list (some not previously raised 
with the USG) of additional GOI initiatives for both the base 
transition and defense planning tracks, including: 
 
--creation of a publicly-owned development corporation to manage the 
conversion of the former NASKEF site to civilian use; 
 
--creation of a cabinet-level body similar to a national security 
council, with its first task the review of all public security 
legislation; 
 
--increased interagency cooperation between police, Icelandic Coast 
Guard (ICG), and emergency services; 
 
--purchase of new fixed-wing aircraft and ships for the ICG after 
new ICG helicopter acquisition is completed; and 
 
--creation of a think tank on security issues to include 
representatives from all political parties. 
 
¶6.  (U) At the press conference, Haarde described at some length the 
substance of the Joint Understanding and Technical Agreement, noting 
at several points the government's satisfaction at the outcome of 
the negotiations.  In particular, he described the USG's ongoing 
commitment to defend Iceland, which he noted goes beyond the 
guarantees offered by NATO membership.  The PM pointed to the Joint 
Understanding's provisions on the intent to hold annual exercises in 
Iceland, and expressed his confidence that such exercises would 
underline the U.S. military's ability to defend Iceland with mobile, 
agile forces.  He also described the GOI's hopes for further 
engagement with U.S. law enforcement agencies as well as the U.S. 
Coast Guard, as set out in the Joint Understanding. 
 
 
REYKJAVIK 00000357  002.4 OF 002 
 
 
¶7.  (U) Haarde also devoted considerable time to the issue of 
environmental mitigation at the NASKEF site, noting that the two 
governments had expended considerable effort on the matter. 
Commenting that it is simply not possible to run an airport without 
pollution, Haarde outlined U.S. military efforts at environmental 
cleanup over the years and emphasized that of the known 60 sites 
with some form of pollution, none are known to pose a danger to 
human health.  The PM said the GOI was pleased with the information 
it had received from the U.S. military on environmental issues and 
said this information and further plans for environmental mitigation 
efforts would be made public. 
 
¶8.  (U) For his part, Minister of Commerce Jon Sigurdsson (standing 
in for Foreign Minister and fellow Progressive Party member 
Valgerdur Sverrisdottir, in New York for the UN General Assembly) 
affirmed his party's support for the agreements, and was even more 
direct than the PM on the need for Iceland to take a bigger 
responsibility for its own security.  "We need to develop an 
independent capability so we can have a serious discussion about 
defense issues," Sigurdsson noted during the Q&A period following 
the PM's presentation. 
 
¶9.  (U) Initial reaction from opposition politicians was muted, as 
they sought to absorb and interpret the broad program Haarde had 
outlined: 
 
-- The leading opposition Alliance party deployed parliamentary whip 
Ossur Skarphedinsson, who welcomed the government's proposals for a 
multi-party security think tank and increased law enforcement and 
security agency cooperation.  At the same time, Skarphedinsson 
complained that the talks' outcome still left Icelanders in doubt as 
to their security, as "no Icelander except for two ministers has 
seen" the EUCOM defense plan for Iceland. 
 
-- Left-Green Chairman Steingrimur Sigfusson, a declared pacifist, 
welcomed the departure of U.S. forces but criticized the GOI for 
permitting the U.S. to leave without bearing full responsibility for 
environmental issues on the base.  He stated his opposition to 
future exercises and defense cooperation as outlined in the 
agreements, saying he had hoped Iceland would take the opportunity 
to abrogate the 1951 bilateral agreement and establish an 
independent foreign policy. 
 
¶10.  (SBU) Following the PM's announcement, Ambassador gave 
interviews to several of Iceland's leading media outlets.  We plan 
to continue our outreach efforts in the media and with contacts from 
numerous affinity groups (e.g. parliamentarians, business leaders, 
students) over the days ahead. 
 
¶11.  (SBU) Comment:  The PM played it straight during his press 
conference outlining the defense agreements, delving into the finer 
details of the agreements with confidence.  His comprehensive 
overview of the documents will likely help to counter some criticism 
- already being voiced by opposition party members seemingly too 
overwhelmed by  the sheer volume of information they received today 
to mount a nuanced riposte - that the GOI could have "gotten a 
better deal" if it had been better prepared for the talks. 
Similarly, Haarde's efforts to keep the focus on future bilateral 
cooperation in defense and security affairs, as well as the 
unveiling of a list of domestic GOI initiatives in this area, will 
be to our benefit as we seek to expand on this message in the weeks 
and months ahead.   One indication of how far the conversation on 
security affairs has come in six months was the PM's use of the 
phrase "a new chapter" in Iceland-U.S. relations, the same metaphor 
that Icelandic media - convinced the base closure would bring to an 
end the U.S.-Iceland security saga - excoriated U.S. officials for 
using back in March. 
 
VAN VOORST