Iceland does have a history of protecting free speech and of sheltering dissidents, including that rarest of breeds: people seeking political asylum from the United States. Bobby Fischer, a famous American chess player who ran afoul of U.S. law when he broke sanctions against Yugoslavia to play a chess tournament there, ending up fleeing to Iceland. It previously hosted WikiLeaks, the anti-secrecy organization that's since leaked huge amounts of U.S. secrets, and the country's Pirate Party – yes, it's a real political party, with seats in the legislature – still maintains friendly ties to WikiLeaks chief Julian Assange. A member of the Pirate Party recently announced, "We have called in our lawyers and are ready to assist [Snowden] if he comes to Iceland. ... If he decides to come to Iceland, I think we could protect him."
But it turns out that not everyone in Iceland is eager to harbor Snowden and there are reasons to suspect that the NSA leaker might not necessarily win asylum in the country. Iceland's government shifted to the right just a few weeks ago, empowering leaders who may be less eager to anger Washington. Icelandic immigration officials, asked recently about whether or not they would accept Snowden, said only that he would have to first enter the country's borders before he could apply – apparently ruling out the possibility that he might request asylum from an Icelandic embassy. The U.S. has sometimes allowed dissidents who cannot make it safely to American shores to apply for asylum from U.S. diplomatic outposts, although this is not a standard international practice.
The Pirate Party, for all of its fame abroad, holds only three of the legislature's 63 seats. Even the Icelandic Modern Media Initiative, an organization that's headed by the Pirate Party's founder and has declared itself an ally of both WikiLeaks and Snowden, put out a press release warning, "Our next step will be to assess the security implications of asylum, as it is possible that Iceland may not be the best location, depending on various questions regarding the legal framework."
After several years of a left-leaning government, two center-right parties took Iceland's parliament in an April election. The parties are seen as trade-oriented and as skeptics of joining the European Union, two positions that suggest a greater embrace of the United States. Harboring Snowden would be unlikely to do much for U.S.-Iceland relations, likely a sensitive issue as Iceland's economy continues to struggle after its 2008 collapse. As Josh Marshall of Talking Points Memo put it, "[Snowden's] highest hope is to get asylum in Iceland. I can pretty much guarantee you that that’s not going to happen. A small country that wants to be close friends of the United States is not going to do that."
It's still too early to rule out the possibility that Iceland might allow Snowden asylum if he makes it there. It's entirely possible that, for example, a groundswell of Icelandic grassroots support could convince the new center-right government that this would be a necessary concession to the left. But, in order for Snowden to win asylum in Iceland, he does first have to travel halfway around the world. Then he has to convince Icelandic officials that accepting him would be worth the diplomatic costs. And, lastly, he would have to make a persuasive legal case that he qualifies for asylum, which might not actually be that easy. After all, even Julian Assange, who once based his organization on Icelandic soil and maintains close friends in the country's parliament, had to hole up in the Ecuadorian embassy in London.