It was the second most important event to take place in Iceland during the Cold War. However, it could easily have been one of the most important events to take place ever, and not just in Iceland, but anywhere. World peace seemed closer than ever before, yet so far away.
Icelanders were at this point not completely unused to being at the centre of the universe. The first time the two Cold War superpowers met in Reykjavík, it was not to discuss world peace, but to play a game of chess. This was the Fischer-Spassky chess match of 1972, and never before had so much attention been focused on a small North Atlantic island.
Rambo, Rocky and Chernobyl
Fast forward to 1986. The stagnation era of Brezhnev is at an end in the Soviet Union, due to its dynamic and (by Russian standards) young new General Secretary, Mikhail Gorbachev. Gorbachev wants to stimulate the Soviet economy with his twin policies of Perestroika (“restructuring”) and Glasnost (“openness”). But free speech comes easier than economic success, and many of the voices he unleashed hoping they would criticise the failures of the system were increasingly turning on him. On top of this, the Soviet Union is mired in its dirty little war in Afghanistan, apparently as unwilling to learn from the lessons of Vietnam as the Americans themselves.
In the United States, Ronald Reagan has won two presidential elections largely on the strength of his optimism to resounding chants of “U-S-A! U-S-A!” However, all is not well in the land of plenty. Reagan had promised to balance the budget, cut taxes and increase military spending. The idea was that the tax cuts would stimulate the economy to the extent that the total sum of taxes collected would be greater, even if the percentage were lower. Reagan’s GOP competitor in 1980, George Bush, dubbed this voodoo economics, but was silenced with the position of Vice-President. Only a year after Reagan took office, the economy was in shambles, but he kept going, running up a huge deficit to pay for his policies. By his second term, he was increasingly turning to foreign policy instead. In cinemas the year before, Sly Stallone beat the Soviets in the ring in ‘Rocky IV’ and re-fought the Vietnam War in ‘Rambo II.’ It was now Reagan’s turn to get in the ring with the Russians.
Iceland enters the world (again)
Ever since the nation achieved independence in 1944, the Icelandic economy had been tightly regulated. Obtaining foreign currency or permission to import foreign goods mostly depended on being granted ‘official permission.’ Unsurprisingly, the officials in charge preferred giving said permissions to their friends and family members.
Travelling abroad usually included long shopping lists from acquaintances for products unavailable at home. The media was also strictly regulated. The state ran two radio stations and a TV channel that operated six days a week, eleven months a year. This was all about to change. In 1986, Reykjavík’s first proper shopping mall, Kringlan, opened for business. That same year, the first privately owned radio stations and even a new TV channel, Stöð 2, came into being. These “free” media would eventually, as in Russia later on, wind up in the hands of a few tycoons, but that is an entirely different story.
The year before, Iceland had won the Miss World Competition and in 1986 an Icelander became the World’s Strongest Man for the second time in three years. In general, Icelanders felt pretty good about themselves and the superpower meeting in Reykjavík was further proof that Iceland had finally broken its isolation and was claiming its place on the world stage.
Gorbachev and the Duracell bunny
The meeting in Reykjavík was a long time coming. Nixon had pursued a policy of détente, avoiding direct conflict between the powers. He took pride in meeting with the Soviets, the Chinese and even the French, sitting down with French President Georges Pompidou at a previous Reykjavík summit in 1973.
Reagan, however, showed little interest in meeting with leaders other than fellow conservatives Margret Thatcher and Helmut Kohl. By the beginning of his second term in 1985, no Superpower summit had been held since the Carter presidency in 1979, before the Soviet invasion of Afghanistan and the deterioration of relations that followed. In the 1984 presidential elections, Walter Mondale tried to use this against Reagan, asking why he was the first president since Hoover (1929–33) not to meet with a Soviet leader. “They keep dying on me,” quipped Reagan.
This was, in fact, true. During his first term, Reagan had been faced with four different General Secretaries of the Communist Party of the Soviet Union. First the ailing Brezhnev, then Andropov, later Chernenko and finally Gorbachev. A Spitting Image spoof showed Reagan outrunning his adversaries like the Duracell bunny in an ad that was in heavy rotation at the time. Reagan turned 70 the year he took office, but compared to the Soviet leaders, he seemed to represent the vigour of the Western world as compared to the Eastern Bloc.
Reagan’s big premiere
By 1985, when the first Superpower summit for six years was scheduled in Geneva, things had changed. Reagan, by now 74, was showing signs of aging, whereas Gorbachev was at the top of his game at 54. This greatly worried Reagan’s aides, who spent a great deal of time preparing the President. Reagan approached this as he did most things, as a role to be played, and had his foremost Russia expert play the role of Gorbachev, speaking in Russian with an interpreter at hand. He also had cards prepared with the most important information regarding nuclear weapons, cards that the sometimes dropped, whereas Gorbachev was comfortable keeping details in his mind. In the evening Reagan watched Russian movies with his wife Nancy upstairs from the Oval Office, and the night before the big meeting, he prayed to God that he was ready.
The Geneva summit did not produce any major results. The one decision reached was that Gorbachev would go to Washington for another meeting and that Reagan would go to Moscow in return. Before times and dates could be set, a surprise announcement was sent out in 1986. Another meeting would be held, not in either of the capitals, but in five hours flying time of each. This was not seen as a full-blown summit, but rather as an informal warm up before the major events. The place was Reykjavík, the topic of discussion was nuclear missiles, and world history was very nearly changed.
Iceland and NATO
Iceland, despite trading with the Eastern bloc more than any other country (comparatively), had proved a pliant NATO ally. The US Naval Base in Keflavík was an important source of foreign currency, with permission to provide goods and services to the Americans (usually at exorbitant prices) given to a select few members of the usually in-charge Independence and Progressive parties.
This was spoofed in the annual New Year’s Eve comedy show at the end of 1986. In it, Reagan arrives in Keflavík to a red carpet reception, whereas Gorbachev is detained in customs on suspicion of smuggling vodka and furs to Iceland. Another source of mirth was the first and heretofore only act of terrorism in Iceland, when Sea Sheppard sank a couple of whaling ships in Reykjavík harbour.
It was not just Icelandic comedy writers who took note. The world’s press descended on Reykjavík and camped outside Höfði House, where the meeting was taking place. For two days few reports emerged, while Reagan slept at a US embassy building and Gorbachev stayed in a Russian ship in Reykjavík harbour. Most of the remaining time was spent behind closed doors. Reagan sought to discuss human rights in the Soviet Union, the rights of Jews and dissidents to emigrate and the war in Afghanistan, but Gorbachev wanted to limit the discussion to nuclear weapons.
Reagan’s relationship to nuclear weapons was complex. In the 1970s, he had severely criticised Nixon’s policy of détente with the Soviets. In 1976, when asked how he would respond to North Korea taking 37 American hostages if he were President, he said he would nuke a North Korean city every hour until the hostages were released.
During his first term as President, he had escalated the arms race by placing medium range Pershing missiles in Western Europe, leading to massive peace protests including a million man march in Central Park. Nevertheless, he seemed at the same time vary of nuclear weapons. His supporters say it was the responsibility of office, which proved to him the perils of nuclear war, which was just a push of a button away. His detractors would rather say it was his Christian worldview. Reagan once warned a Senator that according to the Bible, Armageddon would start in the Middle East and the Russians would be involved. Perhaps he simply did not want his presidency to culminate with the End of Days?
Whatever the reason, Reagan soon came up with a plan to render nuclear weapons useless. In 1983, he announced a plan to destroy incoming missiles with the aid of satellites in space. This was known as the Strategic Defense Initiative or SDI, but journalists soon dubbed it “Star Wars,” for obvious reasons. When asked whether this might not tempt the Americans into attacking first if they no longer needed to fear reprisals, he offered to share the technology with the Russians. This plan seemed nonsensical to many and prompted some to worry that the Soviet leader might trick him into giving up the US’s nuclear deterrent. Many argued that Gorbachev was just another leader trying to spread world communism by different means. At the very least, the hawks in his administration wanted any deal on nuclear weapons to be linked to a deal on conventional weapons, where the Soviets had superiority.
Gorbachev had reasons of his own for wanting arms control. More than a year after taking office, his economic reforms had not achieved many concrete results. People still had money, but there was nothing to buy. A campaign against alcoholism had led to him destroying some of the Soviet Union’s wine acres, while pushing alcohol sales underground and depriving the state of billions of dollars in revenue. At the beginning of the year, the Chernobyl reactor exploded in Ukraine, proof to some that the Soviet Union was rotten right to its nuclear core. Defence was eating up as much as 20% of the Soviet budget. An arms limitation agreement would not only give him clout at home, but also free up funds for use elsewhere in the economy. Many of his hard-line critics, however, were worried that he was weak and would surrender the Soviet Union’s nuclear deterrent to the enemy.
Gorbachev had been candid when the two first met at Geneva: “You ask what changes in the world economy could be of benefit to the Soviet Union. First of all, an end to the arms race. We would prefer to use every rouble that today goes for defence to meet civilian, peaceful needs.”
Gorbachev showed an open hand; Reagan kept his cards close to his chest. Before the meeting, he wrote a memo to himself that said: “How about just hanging back until we get some of the things we want instead of giving consideration up front to what they want?”
The stage was set for a historic meeting, but who was conning whom?
’The Spirit of Reykjavík’
Many stories circulated about the Höfði meeting, and not all of them involved the ghosts of diplomats and writers that allegedly inhabit the house. While the two leaders met alone with their scribes and translators, every other room in the small mansion were taken up by other negotiators who went on well into the night, including Secretary of State George Schulz and Soviet Foreign Minister Eduard Shevardnadze. Even one of the two bathrooms was used as an office, with the toilet seat serving as a table.
Everyone seemed caught up in the moment. Gorbachev wanted to cut the number of nuclear missiles in half, but this was topped by Reagan who suggested getting rid of them altogether. The meetings were scheduled to go on for two days, but a third day was added. This might even have stretched on, had Reagan not promised Nancy to be home in time for a late dinner, and his aides knowing better than to argue. Had she been there, as Gorbachev’s wife Raisa was, more time might have been allocated to nuclear disarmament.
The process was gruelling. James Mann, a professor at Johns Hopkins University and Reagan biographer, says:
“Sitting in a meeting with Reagan required patience—sometimes more patience than Gorbachev possessed. Reagan told anecdote after anecdote. He quoted from letters he claimed to have received. He repeated the same phrases and lines over and over again, never going beyond them or explaining their particular relevance to the point at hand.”
National Security Council adviser Rudolf Perina adds:
“In general, Gorbachev thought he was clearly smarter than Reagan… Sometimes, when Gorbachev made a clever point, he would look around the room, in the vain hope that there would be some audience there to recognise his superior intelligence. But there was no one there but the notetakers, who would avert their eyes and go back to their notes.”
By the end, Gorbachev proposed a 0-0 solution: getting rid of all short and medium range missiles in Europe. In addition, he wanted to cut the amount of long-range missiles in half, but he still wanted to keep a hundred medium range missiles in Asia, no doubt in case there were problems with the Chinese. Reagan agreed in principle, and even proposed to get rid of all nuclear missiles in ten years. There was just one little snag: SDI, or “Star Wars”.
Gorbachev wanted a ten-year ban on the testing of SDI. Reagan refused, but offered to share it. Gorbachev said he doubted this, as the US was not even prepared to share oil-drilling technology. Finally, Reagan accused Gorbachev of turning down a historic opportunity because of a single word. Gorbachev said it was a matter of principle. It could go no further.
Bemused Icelanders looked on as the two world leaders departed. “That didn’t go too well,” said a local correspondent to a taxi driver on the way home. “No, I didn’t make nearly as much money as I thought,” answered the cabbie.
‘The Curse of Reykjavík’
Gorbachev may have been the smarter man, but Reagan had the deeper pockets. Gorbachev desperately needed a deal. Reagan wanted one, but did not yet need one. So, no deal was made. Both returned home to little acclaim, even if Reagan’s spin machine did its best to herald it as a triumph, and the President gave an Orwellian speech at the Keflavík Naval base where he said he would never surrender the free world’s ability to defend itself.
Was there some sort of Reykjavík curse operating, particularly when it came to Russians? 14 years previously, Boris Spassky had returned home to disgrace. Fischer received a hero’s welcome and adulation that he spent the next decades squandering, until finally Iceland was the only country that took him in.
Before the year was over, Reagan was having serious troubles of his own. He had been selling weapons to Iran in exchange for the release of American hostages by Hezbollah, and in turn used the money to arm Contra revolutionaries against the elected government of Nicaragua. It was the biggest scandal since Watergate, one that threatened to bring down his presidency. Meanwhile, the crack on Wall Street in 1987 belied the idea that Reaganomics was bringing prosperity to the nation.
Time Magazine wrote at the time: “…the Administration could be hard pressed to find a subject that will compete for the public’s attention. An arms treaty with the Soviet Union, signed at a summit conference in the US with Gorbachev undoubtedly represents Reagan’s best opportunity to surmount his difficulties and crown his tenure in the White House.”
The President seemed to take their advice.
An actor’s technique
This would have been an excellent time for Gorbachev to negotiate terms, had his own situation not gone from bad to worse. The Soviet deficit was now reaching 100 billion dollars, up from virtually zero a decade before. Reagan routinely ran deficits topping 200 billion, but his credit rating was better. Both were burning up vast sums of money on the arms race, but the United States had more money to burn. Gorbachev had to come to terms. He would go to Washington.
In Reykjavík, right between Moscow and Washington, as the song goes, the two men had tried to negotiate on even terms. It was symbolic that it took Gorbachev going to his adversary’s home turf to hammer out a deal largely on Reagan’s terms, proving right Reagan’s vision as to how the Cold War would end: “We win, they lose.”
The negotiations were later spoofed by Harvard historian Marshall I. Goldman. Reagan was notoriously hard of hearing, so his aids usually had to leave the room when he cranked up the volume of the TV (although even Reagan had to hold the receiver away from his ear when an angry Margret Thatcher was on the other end). In Goldman’s words:
“…given Reagan’s hearing problem, Reagan may well have asked, “What did you say?”
“Okay, I will destroy two or three missiles for every one the United States destroys,” answered Gorbachev.
“What did you say?”
“Okay, I will agree to mutual inspection.”
“What did you say?”
“Okay, I will withdraw Soviet troops from Afghanistan as well as Eastern Europe, reduce the size of the army and cut Soviet aid and interference in the Third World.”
A more accurate, if no less colourful description from Reykjavík, sounds like this:
“A Russian note-taker who watched Reagan closely in two summits told Jack Matlock (the US Soviet expert) that the American reminded him of an old lion, lazily watching an antelope on the horizon, taking no interest, dozing a bit.He doesn’t move when the antelope stops only ten feet away, that’s too far. At eight feet, the lion suddenly comes to life. Reagan, the negotiator, suddenly fills the room.”
Gorbachev was not the only one to bear the brunt of Reagan’s negotiating technique. In the words of Reagan biographer and USC scholar Richard Reeves, Tip O’Neill, Speaker of the House of Representatives, “thought the President always grabbed a little bit more after a deal was made. The President, who had once negotiated contracts as president of the Screen Actors Guild, considered himself a shrewd bargainer. O’Neill agreed with that, and he did not like it one bit.”
Mr. Gorbachev goes to Washington
Gorbachev, meanwhile, was notoriously flexible. We turn again to Goldman’s description of the Soviet leader:
“His continued shifting between anti-reform and reform measures might be explained as the inevitable consequence of the fact that he had no road map. He knew where he wanted to end up, with a more productive consumer-oriented economy, but he did not know how to get there…he tried one approach for a while and, if that did not produce results quickly, he then tried something else or reversed himself, only to end up in another dead end.”
Much the same seems to be true of his foreign policy. The most dramatic instance came with the opening of the Berlin Wall in 1989, which Reagan had asked for in a famous speech two years earlier. No one was sure if the surging crowds should be stopped or not, so they surged through and communism came to an end in Eastern Europe.
For all his contradictions, Reagan had a clear vision of where he wanted to go and a better idea of how to get there, whereas Gorbachev muddled through from day to day. This, as well as the fact that the United States could run up bigger deficits than the Russians, were probably the two things that determined the outcome of the Cold War in the 1980s.
Reagan’s supporters would later argue that the whole Star Wars program was one masterful con to get the Russians to enter into another arms race they could not possibly hope to win. In this view, it was the very threat of Star Wars that brought down the Soviet Union.
A war of appearances
Even if Reagan wilfully aimed at bankrupting the Soviets, one could question the wisdom of a policy that meant running up a record deficit to construct a weapons system that did not work and missiles that would soon be abolished, in the hope that it would cost the other side even more. But such was, perhaps, the logic of the Cold War. It certainly fitted the logic of Ronald Reagan. For someone who wanted to increase government revenue by cutting taxes, building more nuclear weapons in the hope of abolishing them might seem like an obvious step.
The Russians knew that Star Wars was not going to work, but the Cold War was largely a question of appearances. Soviet missiles in Cuba in 1962 did not offer any real military advantages; they could just as easily be fired from Russian soil with the same results. But they appeared to give the Soviets the upper hand, and hence the US could not allow them. Similarly, if the US had an SDI program and the USSR did not, the latter would look weak by comparison, and if anyone ever found out it did not work, it would be too late anyway.
Gorbachev gave up his opposition to SDI and his missiles in Asia. The deal made in Washington was not as comprehensive as the one discussed in Reykjavík, which might have abolished nuclear weapons altogether. The United States agreed to destroy 859 missiles and the Soviet Union 1752. This was only about 4% of their total arsenals, but the symbolism was significant. Nuclear weapons would still exist, but the thought that the world might end at the push of a button has become more distant, even as the possibility of limited nuclear war in other a regions has become more likely.
Gorbachev’s dilemma was probably unsolvable. In order to go ahead with his reforms, he had to end the Cold War, but by the rules of the Cold War, blinking first was tantamount to full surrender, and would eventually cost Gorbachev his job and any chance at restructuring the system.
End of Empire
Gorbachev would return to Iceland on the 20th anniversary of the Höfði summit in 2006. Ironically, it was the same year that Bobby Fischer moved to Iceland. It was also the year that the US Naval Base in Keflavík was closed, the American military hard pressed in the Middle East recalling its troops much like the Roman Empire withdrawing its legions from Britain in its final days.
Both Reagan and Gorbachev tried to breathe new life into their respective economic systems with policies that were seen as revolutionary at the time. Gorbachev failed, and oversaw the collapse of communism. There is little doubt that this came as a blessing for Eastern Europe, where he remains popular, but many in Russia itself feel worse off than they did before he came to power.
Reagan emerged as the winner in the short term, but in the long term he may also have fatally wounded the system he fought for. Deregulation and deficits became the order of the day, and are now costing the US dearly.
Reagan never came back to Iceland, but with the advent of the long term of Prime Ministership Davíð Oddsson in 1991 and his program of cutting the state down to size, Iceland became ever more Reaganesque. As then Vice-President George Bush said when Reagan was in the hospital after an assassination attempt in 1981: “We will all act as if he were still here.” This is more or less what Iceland, and most of the world, have been doing since the days of the Reagan Presidency. For better, and mostly, for worse, it is Reagan’s world we live in now.
The Soviets had invaded Afghanistan in December 1979. This led to a substantial worsening of East-West relations, the West boycotting the Olympic Games in Moscow in 1980 and the Eastern Bloc boycotting the Olympic Games in LA in 1984. More covertly, massive military assistance was being sent to Afghanistan.
The Soviets had been busy making enemies, and by the 80s everyone from Israel to Pakistan to Saudi-Arabia to China, not to mention the United States and its NATO allies all chipped in to arm groups that would later become the Taliban and Al-Qaeda. Pop culture did its part too, with James Bond and Rambo going off to take part in the Jihad. In 1986, Gorbachev had announced a partial withdrawal, but it would take more than two years for the superpower to fully withdraw. The war in Afghanistan is still ongoing, with slightly different players.
Reagan had invaded Grenada and sent the Marines to Lebanon, but by US Presidential standards, his accumulated body count was slight. His most protracted war was with Colonel Qaddafi of Libya. In 1986, Libyan agents blew up a disco in West Berlin, which was frequented by American soldiers. Reagan responded by bombing Tripoli.
As with most major events, this too could be traced to Iceland. In the mid-70s, Iceland had unilaterally enlarged its sea boundary to 200 miles, prompting a Cod War with the British. The Royal Navy was sent on the scene, but no shots were fired. Qaddafi attempted to do the same in 1981, but the US Navy said it would only respect the 12-mile boundary. Qaddafi threatened to destroy anything that entered into his 200-mile limit, which he called a “Zone of Death”, and sent out fighter jets against the Americans, two of which were shot down.
The war with Libya is still ongoing, with largely the same players.
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