Iceland reviews defense policy and confronts overtourism to protect identity and sovereignty
In 2025, Iceland is facing two major national challenges: redefining its defense strategy and responding to overtourism that threatens local life and sustainability. Following growing military tension in the North Atlantic—especially around the GIUK (Greenland–Iceland–UK) Gap—the Icelandic government under Prime Minister Kristrún Frostadóttir has begun reassessing its national security posture. Despite having no standing army, Iceland plays a critical role in NATO, notably through the Keflavík air base. A public referendum on starting EU accession talks is being considered before 2027, signaling a possible shift in foreign policy. Meanwhile, tourism continues to surge, with over 2.3 million visitors in 2024—nearly seven times the country's population. The boom has led to housing shortages, rising costs of living (especially in Reykjavík), and environmental stress.
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Economy