German economy (manufacturing exports) is pretty much the opposite to the Iceland economy (primary sector). Iceland would be in a similar position to Norway. Basically Europe needs new primary sector partners to replace Russia, so Iceland would be very welcome and it'd seem a good synergy.
Iceland hasn't been a primary sector economy in decades. They are now a service economy, especially software and finance.
They are no longer a poor nation of fishermen. They are now among the wealthiest countries (per capita) in the world. They would not be well suited to taking Russia's role in the European economy.
About the closest similarity is that Iceland does have a significant energy sector. But it's hydro and geothermal, not well suited to export. They might make an awesome data center hub.
>Iceland hasn't been a primary sector economy in decades. They are now a service economy, especially software and finance.
Try tourism, outstripped our biggest industry (fishing exports) years ago.
> They might make an awesome data center hub.
Except for the fact that we're equidistant to any major population center which means high latency to everyone. Might work for AI, crypto mining or the few other non-latency dependent hosting niches however.
It's a small population with a lot of natural resources. Much potential to expand into other areas where they can leverage their cheap (compared to rest of Europe) energy. For example steelmaking, ammonia/fertilizer, really anything that takes a lot of energy and can be exported as embodied energy. The same model as the aluminium smelting.
