Saga - 1995, Page 54

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VALUR INGIMUNDARSON
gressive Party and the Social Democratic Party, was that the Soviet
suppression of the Hungarian Revolution and the Suez Crisis, had
demonstrated the need for continued U.S. military protection. The
remaining coalition partner, the People's Alliance — made up of
the pro-Moscow Socialist Party and a neutralist splinter group
from the left wing of the Social Democratic Party — opposed the
move, but accepted it, nevertheless, to prevent the break-up of the
government.
On the basis of newly-declassified U.S. and Icelandic documents,
the article challenges the single-cause explanation of the govem-
ment's policy change — an explanation later reaffirmed in the
memoirs of the cabinet ministers involved here — on several
grounds. First, it demonstrates that the Eisenhower Administra-
tion offered the Icelandic govemment economic assistance, in the
form of highly advantageous loans, on the condition that the U.S.
military forces would remain in Iceland. Secondly, it provides
svidence for the contention that the Icelandic government accepted
these loans despite the strings attached. Thirdly, it argues that the
Progressives and the Social Democrats were prepared to reach a
nodus vivendi with the Eisenhower Administration before the
Tungarian Revolution. The idea was to revise the 1951 Defence
\greement with the United States without scuttling it altogether,
o allow continued U.S. presence in Iceland, while insisting on a
eduction in military personnel. Finally, it makes the point that the
Tungarian Revolution affected the outcome of the crisis in the
ense that the Icelandic govemment dropped its demands for par-
ng down the U.S. military presence in Iceland. This paved the way
or a quick settlement between the two sides at the end of Novem-
er, confirming the status quo in the U.S.-Icelandic military rela-
ionship.
More broadly, the article analyzes the links between politics and
conomics, between the need of the Icelandic government to fin-
nce large-scale development projects and the need of the Eisen-
ower Administration to safeguard its strategic interests in Ice-
ind. It shows how the United States and West Germany tried to
ifluence Icelandic politics before and after the Icelandic parlia-
lentary elections in the summer of 1956 in an attempt to reverse
le decision on the withdrawal of U.S. forces. It also details the
ays, in which the Americans and West Germans — together with
:her NATO members — put pressure on the Icelandic govern-