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US landing rights there. The US was granted permission to operate the technical facilities of the airfield and to provide the technical personnel necessary to maintain the field as an international airport for a minimum of 6 1/2 years in order to fulfill "US obligations to maintain control agencies in Germany." American Overseas Airlines, through its subsidiary, the Icelandic Airport Corporation, is designated as the agent of the US in the operation of the field. The last of the United States armed forces were withdrawn in April 1947. US operation of the facilities at the Icelandic-owned field continues to present many technical difficulties which cloud the friendliness of US-Icelandic relations. Icelanders, in their trepidation of harboring a military base, or even an "American air base," question every improvement involving the use of American personnel and material. Propaganda in the Communist press keeps this fear constantly before the public, with most officials and politicians reluctant to display any cooperation which could be labelled pro-American. One exception to the general rule is Foreign Minister Benediktsson (Conserva- tive) who is outspoken in his anti-Communism and pro-Americanism. He has been ex- tremely cooperative in attempting to alleviate the difficulties involved in the imple- mentation of the airport agreement and is anxious to promote closer US-Icelandic rela- tions. Present US efforts to aid Iceland's economy (projected ERP aid and the promo- tion of the UK-Icelandic arrangement for the sale of Iceland's fish for consumption in the Western occupied zones of Germany) may help to improve relations. b. Scandinavian Countries. Iceland is considered one of the Scandinavian countries by virtue of racial origin, cultural heritage, and close association with both Norway and Denmark. Not being absolutely sovereign prior to the war, Iceland was not a member of the Oslo States. The country is now participating, however, in Nordic ministers' meetings which endeavor to formulate a unified and cooperative policy for the Scandinavian countries in international organizations, and is consulting with the other Scandina- vian countries concerning closer economic collaboration and the possibility of a Scandinavian customs union. Iceland is eager to develop closer relations with Nor- way, Sweden, and Denmark, but in addition to Iceland's nationalism and jealousy of sovereignty the competitive nature of their economies imposes added obstacles. Iceland is resentful of any moves by the other Scandinavian countries which appear dominating or dictatorial. Iceland considers itself closer to Norway than to Denmark or Sweden. In re- cent Nordic ministers' meetings the Icelandic spokesmen aligned themselves with the Norwegians to urge the Swedish and Danish governments to adopt a strong anti- Communist program. Iceland's Foreign Minister is extremely critical of Swedish Foreign Minister Unden's neutrality policy. C. The United Kingdom. Iceland's ties with the UK are principally economic, and since 1939 the UK has purchased the major part of Iceland's exports. Iceland's inability to secure re- SECRET III-2

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    "ocrText": "US landing rights there. The US was granted permission to operate the technical\nfacilities of the airfield and to provide the technical personnel necessary to maintain\nthe field as an international airport for a minimum of 6 1/2 years in order to fulfill \"US\nobligations to maintain control agencies in Germany.\" American Overseas Airlines,\nthrough its subsidiary, the Icelandic Airport Corporation, is designated as the agent\nof the US in the operation of the field. The last of the United States armed forces\nwere withdrawn in April 1947.\nUS operation of the facilities at the Icelandic-owned field continues to present\nmany technical difficulties which cloud the friendliness of US-Icelandic relations.\nIcelanders, in their trepidation of harboring a military base, or even an \"American\nair base,\" question every improvement involving the use of American personnel and\nmaterial. Propaganda in the Communist press keeps this fear constantly before the\npublic, with most officials and politicians reluctant to display any cooperation which\ncould be labelled pro-American.\nOne exception to the general rule is Foreign Minister Benediktsson (Conserva-\ntive) who is outspoken in his anti-Communism and pro-Americanism. He has been ex-\ntremely cooperative in attempting to alleviate the difficulties involved in the imple-\nmentation of the airport agreement and is anxious to promote closer US-Icelandic rela-\ntions. Present US efforts to aid Iceland's economy (projected ERP aid and the promo-\ntion of the UK-Icelandic arrangement for the sale of Iceland's fish for consumption in\nthe Western occupied zones of Germany) may help to improve relations.\nb. Scandinavian Countries.\nIceland is considered one of the Scandinavian countries by virtue of racial\norigin, cultural heritage, and close association with both Norway and Denmark. Not\nbeing absolutely sovereign prior to the war, Iceland was not a member of the Oslo\nStates. The country is now participating, however, in Nordic ministers' meetings\nwhich endeavor to formulate a unified and cooperative policy for the Scandinavian\ncountries in international organizations, and is consulting with the other Scandina-\nvian countries concerning closer economic collaboration and the possibility of a\nScandinavian customs union. Iceland is eager to develop closer relations with Nor-\nway, Sweden, and Denmark, but in addition to Iceland's nationalism and jealousy\nof sovereignty the competitive nature of their economies imposes added obstacles.\nIceland is resentful of any moves by the other Scandinavian countries which appear\ndominating or dictatorial.\nIceland considers itself closer to Norway than to Denmark or Sweden. In re-\ncent Nordic ministers' meetings the Icelandic spokesmen aligned themselves with the\nNorwegians to urge the Swedish and Danish governments to adopt a strong anti-\nCommunist program. Iceland's Foreign Minister is extremely critical of Swedish\nForeign Minister Unden's neutrality policy.\nC. The United Kingdom.\nIceland's ties with the UK are principally economic, and since 1939 the UK\nhas purchased the major part of Iceland's exports. Iceland's inability to secure re-\nSECRET\nIII-2"
}