Hello! I was watching the History Matters video on the Swedish-Norwegian breakup. When Denmark lost Norway, it negotiated to keep Greenland and Iceland in exchange for giving up Norway peacefully. What strategic value did Greenland and Iceland have for the Danish? And why did Great Britain approve of a fellow naval power keeping two big islands to its North?
While we’re waiting for input from an actual expert, here’s a 'short' writeup (massively simplified) on what I know along with some sources you might want to check out. I’ll assume you already know enough about the Napoleonic Wars and Britain and Denmark’s respective positions in them, so I won’t go too much into that.
Firstly, about the premise: while it might indeed seem strange that Britain would ‘allow’ Denmark to keep the two strategically valuable Atlantic territories, one should keep in mind that Denmark’s status as a major naval power had already been significantly diminished after the Siege of Copenhagen, or flåteranet (lit. the fleet robbery) of 1807, carried out by none other than Britain itself. Britain had previously issued an ultimatum that left the then neutral Danish state between a rock and a hard place: either enter into an anti-French alliance with Britain (thus abandoning neutrality), or surrender its fleet – which was perceived as a considerable threat by the Brits – for the duration of the war, basically ensuring that it could not be utilised against Britain (Glenthøj & Ottosen 2014). The Danes chose neither, so the Brits bombarded Copenhagen, sailed off with the entire fleet, and in spite of their promise to only keep it for as long as the war lasted, never gave it back (as for why neither of the options presented by Britain were considered feasible to the Danish government, refer to the source cited above for more details). Therefore, it might be safe to say that Denmark’s potential to threaten British naval hegemony had effectively been neutralised long before 1814.
Secondly, concerning the question of what strategic value Greenland and Iceland had or didn’t have for Denmark – this would not have been all that relevant in Kiel, considering the very existence of Denmark as an independent state was by then under considerable threat. The Danes were, suffice it to say, in no position to bargain. At the time they were still at war with several other major powers including Prussia and Russia, the former of which still had occupying troops on Danish territory; relief from these existential threats depended on Denmark’s ability to strike agreements with the Great Powers, and in order to do so the cession of Norway – in part or in full – to Sweden was a ‘conditio sine qua non’ (Gad 1979: 187). Thus to use a bit of hyperbole, the Danish diplomats in Kiel did not negotiate to keep Greenland and Iceland in exchange for giving up Norway peacefully; they agreed to give up Norway peacefully full stop, in exchange for Denmark’s continued existence as a state. This decision – to the extent it could be called a decision at all – had effectively already been made even before the Danish diplomats were sent to Kiel (Bregnsbo 2014).
Now back to Kiel: it would first and foremost be worth bearing in mind that, although present day Scandinavians might like to jokingly claim otherwise, the fact that Greenland and Iceland had traditionally been associated with Norway was likely of little to no consequence to all parties involved:
‘Historically-derived "rights" and claims based on legitimacy were of no relevance whatsoever in Kiel and nor was any reference to traditional ties between different areas. The negotiations were a small part of a hard international political struggle for territory and the domination of the suffering regions of Europe.’ (Gad 1979: 196).
It is also worth noting that the Treaty of Kiel actually comprised two separate treaties concluded between Denmark and Sweden and Great Britain, respectively, with the former being the prerequisite for the latter, for reasons that I’ll touch upon later. So let’s summarise the main motivations of the two winning powers at Kiel – namely Britain and Sweden – in broad strokes.
First, Britain: you would be correct in assuming that one of the main motives driving British foreign policy in that time period was to maintain the empire’s status as the great naval power of Europe. This, in addition to securing domination in the northern part of central Europe and subduing Napoleon (who at the time had yet to suffer his final decisive defeat) as quickly as possible, would seem to have been the three main objectives affecting Britain’s stance during the negotiations (Gad 1979). ‘As quickly as possible’ is the key word here, since the Brits were anxious to secure as much support as possible for their ongoing war on the continent against Napoleon; at Kiel, this translated into an eagerness to honour, among other pre existing agreements, the Anglo-Swedish Treaty of Stockholm – itself based on the Russo-Swedish Treaty of Åbo, 1812 – in which they had committed to helping Sweden acquire Norway (instead of attempting to reclaim Finland from Russia) in exchange for military support. (Lucas 1990) Thus, the British and Swedish negotiators had a lot of their interests aligned and worked closely together during the events in Kiel.
On the other hand, Britain did not wish to see Sweden emerge from the treaty powerful enough to challenge its own dominance in the Baltic; a balance of power was preferred, and in this respect compensating the already massively weakened Denmark with the Atlantic islands seemed optimal:
‘According to the "personal observations" of [two prominent Danish statesmen involved in the negotiations with Britain], the aim of British policy was that Sweden should limit herself to the eastern Baltic and Denmark to the western part of that sea.’ (Gad 1979: 196).
Additionally, Britain had its own economic interests in the Atlantic; it had been involved on and off in the affairs of the Iceland, Greenland and the Faroe Islands throughout the course of the war – these had, among other things, been excluded from the blockade that had caused mainland Norway much grief. It would thus make sense for the Brits to be reluctant to see them pass into Swedish hands. (ibid.)
As for Sweden, it would seem as though there was never any serious attempt at securing the Atlantic islands in addition to mainland Norway. The acquisition of Norway from Denmark had been a conscious objective in Swedish foreign policy even before the start of the Napoleonic Wars – ‘as Gustaf IV Adolf put it in 1801, the goal was "to place Norway under the rule of the Swedish king by force or by negotiation"’ (Feldbæk 1990: 260) – and after the loss of Finland this goal only became more urgent than ever. Karl Johan Bernadotte, as the newly elected future monarch of Sweden, was aware of the Swedish nobility’s revanchist designs on Finland; he was also thoroughly uninterested in going to war against Russia, and had therefore turned his sights firmly on Norway instead. Securing Norway (mainland Norway, to be exact) would consolidate Sweden’s position in the eastern Baltic and cement its status as the dominant Scandinavian power (Glenthøj & Ottosen 2014); acquiring the Atlantic islands did not appear to be indispensable to the accomplishment of this goal, and official Swedish policy thus had little incentive to go against the wishes of Great Britain on this particular matter.
TL;DR: Denmark was in too weak of a position to make demands either on Norway or its supposed dependencies; Britain, in a hurry to restore peace and order in the north so that it could funnel all its attention into the war on the continent, was eager to back Sweden up in its claims to Norway, but at the same time reluctant to see any one of the Scandinavian kingdoms become too powerful; Sweden’s main objective was to obtain mainland Norway, while the Atlantic islands were of little strategic importance – or at least, little enough that the Swedes apparently did not care to challenge Britain on the subject. (For a more detailed analysis of how the actual negotiation process likely proceeded, I highly recommend Gad’s article; it’s a riveting read filled with realpolitik and diplomatic intrigue).
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(*Edited for formatting.)