13. The Cold War helped create the climate for the ensuing Cod Wars
In 1952 Iceland extended its territorial waters by one mile and placed several areas off-limits to foreign fishing boats. The British reacted by increasing taxes on fish landed in Britain by Icelandic fishing boats. Since Britain was Iceland’s biggest market for fish, the decrease in profits caused by the punitive taxes threatened Iceland’s biggest industry. During World War II the strategic importance of Iceland in controlling the Atlantic trade lanes became paramount, a fact not lost on the Soviet Union. The Soviets, to foster good feelings in Iceland, began purchasing their fish in large amounts. In those opening years of the Cold War, the United States viewed increased Soviet influence in Iceland with considerable dismay. They responded by purchasing large amounts of Icelandic fish as well. Suddenly tiny Iceland found itself with considerable influence in NATO, a situation they used to their advantage.
The United States helped increase Iceland’s importance in the 1950s through its defense planning, which relied on keeping the Greenland, Iceland, United Kingdom Gap (GIUK) open for shipping in the event of war with the Soviet Bloc. It also encouraged other NATO countries to increase their purchases of Icelandic fish, notably Spain and Italy. For a time, the United States’ support of Iceland threatened the so-called “special relationship” with the United Kingdom. Nonetheless, in 1956, Great Britain recognized the Icelandic extension of their territorial limits (4 nautical miles) and the restrictions against British fishing in certain areas. They also repealed the increases in taxes on Icelandic fish. Nonetheless, through remainder of the 20th century several disputes between Iceland and Great Britain, involving both nations’ naval assets and several incidents at sea, occurred. They are known as the Cod Wars.