It was an inevitability that Russia’s mooted 4 billion Euro loan to Iceland would provide grist to the Russophobe mill. Today the Telegraph website carries a piece demanding that Iceland reject any loan Russia offers in response to its request for credit, suggesting that America should pressurise the IMF to respond with a generous counter offer.
Russia is suffering its own stock market collapse and has moved to underpin its financial sector to the tune of 140 billion Euro. In the light of this internal crisis, the Telegraph speculates that the Kremlin will seek to extract substantial concessions from Iceland in return for the loan.
Clearly, if a loan is to be secured, there will be conditions on which it will rest. Russia may wish to house refuelling facilities for its air force on Iceland for example. The island will, however, remain part of Nato and speculation that a Russian military base could be situated there, is wide of the mark.
The USSR enjoyed a more convivial relationship with Iceland than with other Nato members during the Cold War, when the Soviets provided it with oil. As Geir Haarde’s government failed to secure aid from neighbouring countries, an arrangement with Russia became a logical avenue to explore.
Once again the issue hinges on respect. Russia is a large and powerful nation which is entitled to pursue and protect its interests on the international stage. Many western nations, led by the United States, do not wish to recognise this entitlement and seek to neuter Russia and arraign states who maintain friendly relations with the Russians.
Iceland is fully entitled to enter into an arrangement with Russia and should not be censured for doing so. Demonising Medvedev’s regime is becoming a requirement expected of any future American president and this tendency cannot extend to countries which enter into freely constituted agreements with the Federation.