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Ministry for Foreign Affairs

Report by Geir H. Haarde Minister for Foreign Affairs and External Trade



Geir H. Haarde

Minister for Foreign Affairs

and External Trade

to the Althing on Foreign Affairs


Madame Speaker

Earlier this year the sixtieth anniversary of the foundation of the United Nations was commemorated at a summit meeting of the nations of the world in New York. Discussions at the meeting revolved around the future role and working procedures of the Organisation and the most pressing problems currently confronting the world. The extensive coverage of the meeting, the events leading up to the meeting and the substance of the meeting is a reflection of the fact that in spite of various setbacks in recent years the United Nations enjoys respect in most regions of the world and in the minds of most people they play a significant role in world affairs.  The United Nations is an imperfect organisation, to be sure, and in need of reform, but few people would like to be without it. It is the only common forum of virtually all the nations of the world.

From the very beginning, the Icelandic government has placed great emphasis on Iceland’s participation in the United Nations in the belief that the UN has the ability to promote peace, stability and economic progress. In addition, membership of the Organisation has served many other Icelandic interests, including important issues such as the Law of the Sea. A general consensus has reigned as regards Iceland’s active involvement in the UN. Iceland’s candidacy for a seat on the Security Council in 2009-2010, a joint undertaking of the five Nordic countries, represents one aspect of this involvement. 

The period leading up to the UN summit meeting was a time of extensive substantive preparation, where Secretary General Kofi Annan played a prominent role with his proposals for reform of the Organisation, which had the support of the Nordic countries as well as other countries. It was hoped that the occasion of the sixtieth anniversary might prove an inspiration and encourage solidarity in promoting security in the world and reinvigorating the campaign against poverty.  Although there was progress on some issues, the conclusions of the meeting were disappointing, and it is clear that many urgent issues remain unresolved. Success was achieved in establishing the so-called Peacebuilding Commission, which is intended to co-ordinate and improve reconstruction work in post-conflict countries. Success was also achieved in bringing about the general recognition that the international community has both the right and the duty to intervene (“responsibility to protect”) where governments are guilty of major human rights violations against their own citizens.  However, this right and this duty is not as clear-cut in the conclusions of the meeting as many democratic states, including Iceland, would have liked.

It is also a matter of great concern that some member states, for various reasons, appear reluctant to improve the United Nations' capacity to do its job. First, attempts to make the necessary reforms to the Security Council were unsuccessful. Second, it is a great shame that an agreement could not be reached on measures to prevent the proliferation of weapons of mass destruction, nor on a clear common definition of terrorism. These are closely related issues, as the greatest current threat to security in the world is the risk of terrorists gaining access to weapons of mass destruction.

Finally, it is sad that it remains unresolved in what form a new Human Rights Council will take the place of the UN Human Rights Commission, which no longer functions effectively. Iceland has long been among the countries which stress the universality of human rights, as unequivocally stated in the United Nations Charter. It is quite clear that human rights are abused in numerous places in the world. For this reason, the Icelandic government feels it is important that a strong Human Rights Council should be formed to monitor human rights and to criticise without compromise those governments which do not respect human rights. It would be intolerable if states which are guilty of serious human rights violations were represented on the Council.

The credibility of the United Nations rests on the ability of its agencies to tackle urgent problems. Human rights violations are among these problems and they undermine peace and security.  States must not be allowed, therefore, to fog the issue. The countries that want the United Nations to play a key role must take the initiative and the lead in reinforcing the organisation.


Madame Speaker,

If we look back on the last century, it can be argued that the situation in world affairs is in many ways better now than often before. International co-operation and trade have never been more varied and extensive, and the prospects of superpower conflicts never more distant. More people are enjoying democratic government than ever before. The revolution in telecommunications and information technology has transformed international relations. And although poverty is still a scourge in many places, the number of people living in destitution has fallen, particularly as a result of economic progress in India and China.

Increasing globalisation has the effect that more and more people are coming to the realisation that peaceful relations are in their interest. International terrorism runs contrary to this trend. It is difficult to defeat opponents who kill from ambush and will stop at nothing, but it can be done through close international co-operation and by completely renouncing all terrorist objectives.  The Icelandic government firmly supports the current work of the United Nations on the preparation of a comprehensive international agreement on anti-terrorist measures. Iceland has always maintained the position that the struggle against terrorism must not be at the cost of human rights or humanitarian law.

It is clear that further proliferation of weapons of mass destruction will increase the likelihood of terrorists gaining possession of such weapons. Each time a new state joins the ranks of nuclear states an incentive is created for other states in the same region to follow suit. The consequence is increased tension and risk of conflict.  Nevertheless, it appears difficult to prevent proliferation. North Korea’s denunciation of the Non-proliferation Treaty and the fact that the government of Iran has for a long time been in violation of its obligations under the Treaty are unacceptable. Also, black-market trafficking in the expertise and technology required for the production of nuclear weapons is a cause of great concern.  It was as a reminder of this serious risk that the Nobel Commission recently decided to award the annual Peace Prize to the International Atomic Energy Agency.

The democratic countries on both sides of the Atlantic continue to have common basic interests, and it is important for them to be able to continue to work together against the major threats of our times. For this reason, NATO continues to play a key role. Collective defence commitments form the basis of the Alliance, but the transformation of the Alliance, enlargement and the new challenges it faces have the result that NATO enjoys a unique position as regards security co-operation in the world. It is therefore important for Iceland to remain an active participant in the Alliance alongside its friends and allies. The Icelandic government will continue to support the ongoing adaptation of NATO to changed circumstances, and in this respect the further enlargement of the Alliance is an option. The Ukraine is among the states requesting membership, and it is important for both the Alliance and the Ukrainian government to work hard on achieving this objective.


Madame Speaker,

The defence co-operation between Iceland and the United States is founded on the membership of the two countries of NATO and it concerns the capabilities and position of the Alliance in the North Atlantic.  Discussions between the Icelandic and US governments concerning the implementation of the Defence Agreement began last July. As is well known, progress has been slow. The Icelandic government is prepared to pay a significant proportion of the operation and maintenance cost of Keflavik Airport, in light of the fact that civil aviation at the airport has increased greatly. In addition, the Icelandic government has expressed its willingness to explore the possibilities of co-operation as regards helicopter search and rescue services, with Iceland assuming an expanded role in that regard. Both of these measures would result in increased expenditures, which demonstrates our sincere wish to find a lasting solution. The principal objective, of course, is to secure minimum defence preparedness in Iceland, which would serve the interests of both parties as well as NATO as a whole, on the basis of the 1951 Defence Agreement and in accordance with its provisions on the division of responsibilities between the two parties.

Iceland’s participation in peacekeeping activities has been growing steadily over the past decade and more, and is now an important aspect of Icelandic foreign policy. This has happened at the same time that international associations and organisations such as NATO, the United Nations and the Organisation for Security and Co-operation in Europe are increasingly calling on all their member states to contribute to joint missions. The Icelandic Crisis Response Unit has also been responsible for Iceland’s contribution to air transport for NATO. Also worth mentioning is Iceland’s participation in the election monitoring activities of the OSCE, where representatives of Iceland have done good work, frequently under difficult circumstances. Finally, personnel has been deployed to assist in the UNIFEM Kosovo project. 

In many cases the requirement is not only that the financial burdens should be distributed equally, but that all the member states should be represented in the field. Despite not having its own armed forces, Iceland has been able to undertake complex peacekeeping tasks under the auspices of NATO. Recently, such tasks include the operation of large airports in Kosovo and Afghanistan and participation in the Provincial Reconstruction Teams in northern and western Afghanistan. This has been accomplished through the recruitment of civilian experts who operate under these circumstances within the framework of the organisational structure and procedures of NATO forces and therefore wear uniforms, have military ranks and carry arms for self-defence. Icelandic Crisis Response Unit personnel are not soldiers, and they are not intended to undertake military tasks; what they do is to work temporarily side by side with NATO soldiers on tasks which in ordinary circumstances would be regarded as civilian tasks.

From the start it has been assumed that there might come a time when changes would need to be made in the work of the Icelandic Crisis Response Unit in Afghanistan in order to ensure to the maximum possible the security of its personnel. For this reason, the Foreign Ministry has closely monitored the progress of matters through weekly reports from the commanders of the Crisis Response Unit and NATO concerning their assessment of the security situation in the country and in individual regions. In recent weeks tension has increased markedly between Afghan warlords in the northern areas of the country, and there have been attacks on representatives of non-governmental humanitarian organisations and peacekeeping personnel. In consequence, the original premises for the deployment of the Icelandic civilian peacekeepers in this area have changed somewhat. The decision has, therefore, been made to cease participation in the Provincial Reconstruction Team in northern Afghanistan, but to continue to work in the western region while things remain as they are. At the same time, possibilities will be explored of other alternative Icelandic contributions to the NATO peacekeeping efforts in Afghanistan which would conform to requirements concerning the security of civilian peacekeepers. It is important for Icelanders to continue to participate in the NATO peacekeeping activities and the OSCE monitoring activities. In the coming years the Icelandic Crisis Response Unit will be enlarged according to plan, and when that happens increased attention will be focused on possible participation in UN peacekeeping activities.

Although the Nordic countries have different affiliations with international associations and organisations and frequently take different positions on international affairs, they have almost invariably been jointly involved in the resolution of regional disputes in the interests of consensus and peace. The peace monitoring mission in Sri Lanka, where Icelanders are working under Norwegian leadership, is a good example. The Icelandic government is prepared to continue its support for the mission while the disputing parties in Sri Lanka so desire and while the Nordic contribution remains unchanged, for, indeed, there is much at stake.

As regards regional disputes, it is always the Middle East, and in particular the Israeli-Palestinian conflict, that takes centre stage. The unilateral withdrawal of Israel from the Gaza strip gave rise to some optimism as regards the implementation of the so-called Roadmap for Peace. Clearly, the government of Israel took a difficult and risky decision, and it is therefore sad that the Palestinians were unable to make better use of the opportunity than they did to shore up the mutual trust which forms the basis for negotiations and lasting peace. In the wider context, the declaration of the President of Iran that Israel should be wiped off the map shows that Israel has good reason to fear for its security. Declarations of this kind are rare in recent times, but this particular declaration forms part of an ideology that explains the isolation of Iran in the community of nations.  These words of the President were spoken at the same time that the Iranian government is suspected of engaging in the manufacture of nuclear weapons.

In spite of the continued atrocities committed by terrorists in Iraq, where the vast majority of victims are civilians, a large majority of Iraq’s population has shown its support in practice for the process of democratization. The results of the recent referendum on the constitution were unequivocal, and the parliamentary elections in December represent the next step. Unfortunately, there is ample reason to fear that terrorists will continue to oppose the democratization of the country with their attacks on innocent civilians. The first government in the history of Iraq with a democratic mandate from its people deserves the moral and political support of other democratic countries of the world.

In recent decades significant success has been achieved in liberalising international trade. The sixth ministerial meeting of the World Trade Organisation will be held in Hong Kong next month. In recent weeks the WTO member states have made efforts to bring the Doha round of negotiations to a conclusion. The point of greatest dispute has involved trade in agricultural products. A compromise on agricultural matters is the key to reaching an agreement on other issues, e.g. on significant reductions in tariffs on marine products. Iceland’s interests, like those of other countries, are therefore complex in this respect, but in general it appears safe to maintain that tariff reductions and the removal of trade barriers rank with the most important interests of the countries of this world, in particular the developing countries. It is, therefore, important to achieve results at the ministerial meeting in Hong Kong, although unfortunately optimism is not running high at this stage.

The Icelandic government has in recent years placed great stress on efforts to increase the number of trade agreements between Iceland and other countries in an effort to strengthen the competitive position of Icelandic enterprises. Free trade agreements, double taxation avoidance agreements and agreements on the protection of investments represent the most important aspect of these efforts. An agreement on the establishment of an Icelandic and Faeroese economic area was signed last August. This is the most extensive trade agreement ever entered into by Iceland, and it therefore represents a major milestone. In addition, the signing of a free-trade agreement between the EFTA states and South Korea, as well as a customs union with South Africa, are scheduled in the near future, and negotiations are in progress with Thailand on the conclusion of a similar agreement. Iceland has also entered into an agreement with China on exploring the feasibility of concluding a free-trade agreement between the two countries, which could also represent a watershed.

In recent years, trade between Iceland and more distant countries has increased significantly. In its free-trade negotiations with other countries, Iceland has placed great stress on the best possible market access for marine products. These efforts have led to the most extensive free-trade network in the world involving commerce in fisheries products, extending both to the European Economic area and to distant continents.

Iceland’s most important market is in Europe. The trade in Europe is based on the solid foundation of the EEA Agreement and no changes are anticipated in that regard. Negotiations on the accession of Rumania and Bulgaria to the European Union have been brought to a conclusion, and these countries are expected to join in 2008, at the latest. It is reasonable to assume that negotiations on the membership of these states of the European Economic Area will begin soon.

This year, negotiations were begun between the Icelandic government and the European Union concerning trade in agricultural products on the basis of the EEA Agreement. The Icelandic government has approached the European Union with the request that market access for lamb products should be improved and exports of horses to the European Union facilitated. At the same time, the government has decided to take up negotiations with the European Union on adapting to a greater extent to Community law on animal health than the provisions of the EEA Agreement require. This is done for the purpose of facilitating still further the trade in foodstuffs between Iceland and the European Union.


Madame Speaker,

The growing awareness in the international community of the importance of sustainable development has focused attention on Iceland’s special position, especially as regards the utilisation of marine resources and renewable energy. The matters of the oceans are receiving increased international attention.  This is a consequence of pollution, overfishing and diminishing harvests from fish stocks across the world.  It is important for Iceland to participate actively in co-operation with other countries on seeking ways to protect the marine environment. On the other hand, it is a matter of key importance that countries that base their survival on marine resources should continue to be responsible for managing them. Iceland therefore rejects all international attempts to bring about global regulation of fisheries.

Last year, proposals for a global ban on trawling fisheries were successfully blocked and the issue was directed into the proper channels, that is, as states and regional fisheries control organisations, as applicable, were urged to improve their control of demersal fisheries, with particular focus on the protection of the vulnerable environment of the sea. A similar proposal was introduced at the General Assembly recently, but met the same fate. Iceland has taken the initiative in attempts to forge a consensus among the principal fisheries countries of the world on this matter, and the consensus has been growing. In the autumn of 2006, a review will be conducted of measures taken by states and regional organisations to improve the control of trawling fisheries, and it is important for these parties to show that they are worthy of the confidence they have been shown.

The importance of energy issues in international affairs has been growing rapidly.  There are various clouds on the horizon in the world’s energy economy, as reflected, among other things, in the high oil prices and rules limiting the emission of greenhouse gases owing to fears of potential climate changes caused by human activity.  Energy is of special importance to the developing countries, where an estimated 2 billion people do not have access to electricity.

In these circumstances, Iceland focused special attention on the role of renewable energy sources, in particular geothermal energy, in its international co-operation on energy matters.  The special position of the Icelandic energy system, where over seventy percent of the national supply of energy derives from renewable sources, allows Iceland to take a position at the forefront of the countries that emphasise sustainable energy development in the world.  The attempts of the Icelandic government to increase still further the share of renewable energy through hydrogen technology has attracted attention in other countries and opened the door to co-operation with partners across the world.    

Sustainable energy and climate matters will be near the top of the UN agenda over the next two years, as the UN Committee on Sustainable Development has decided to focus especially on these issues.  On the part of the Icelandic government, special efforts will be made to use this opportunity to promote the Icelandic points of emphasis.  In addition, the Foreign Ministry has been presenting abroad the work of Icelandic scientists and the progress made in soil protection and has also appointed a national committee to address this important natural resource issue.

Iceland’s Presidency of the Arctic Council in 2002 – 2004 drew attention to the importance of the Arctic region for our future interests.  The country’s geographical location in the North Atlantic on the boundaries of the Arctic Region obviously encourages increased co-operation with the populations of this region, where profound changes are now in progress, with increased pressures on the natural resources of the North and a possible opening of new shipping lanes.

It is a matter of great satisfaction that an agreement was recently reached concerning blue whiting fisheries. Iceland places great emphasis on the responsible control of fisheries from the important Norwegian-Icelandic herring stock, but this cannot be achieved without a consensus among all the parties involved, that is to say Iceland, Norway, the Faeroe Islands, Russia and the European Union. It is therefore a great disappointment to the Icelandic government that Norway should repeatedly prevent the conclusion of an agreement on control of herring fisheries with their calls for a massive increase in their share of the permitted catch.  Preparations for Iceland’s legal proceedings against Norway before the International Court of Justice in the Hague on the Svalbard issue are well under way, as this appears to be the only way to protect Icelandic interests in the Svalbard region.


Madame Speaker,

At the recent UN Summit in New York, the importance of universal contributions to the campaign against poverty was reiterated. The Icelandic government is well aware of the importance of this campaign, and for this reason development co-operation has gained increased weight in Icelandic foreign policy. It is projected that contributions to development will correspond to 0.35% of Gross Domestic Product by 2009, which will represent a huge increase over the course of a decade. At the same time, a comprehensive policy has been formulated in this regard for the period 2005 to 2009, which was presented in the Althing last spring.

The work of the Iceland International Development Agency will be strengthened, among other things by increasing the number of partner states, with a co-operation agreement already signed with Sri Lanka and negotiations on a corresponding agreement with Nicaragua under way. The government will furthermore increase its involvement in multilateral development co-operation through participation in the useful work of numerous organisations in this area. Our efforts are focused on well defined projects which are appropriate to Icelandic policy. Examples of this include our co-operation with the Fisheries Department of the Food and Agriculture Organisation of the United Nations, where we are supporting the preparation of fisheries teaching material tailored to the needs of individual developing countries. This project will be conducted in close co-operation with the United Nations University Fisheries Training Programme in Iceland. Also, Iceland is a leading participant in a new project, PROFISH, a development fund and co-operation forum of the World Bank involving sustainable fisheries in the developing countries. Through active participation in PROFISH Iceland will exert a direct influence on the World Bank’s development aid in the field of fisheries. The Icelandic government has also emphasised the possibilities inherent in renewable energy resources in the developing countries, and work is currently in progress on exploring potential opportunities in that area in co-operation with the World Bank.

Support for women and children is an important aspect of Iceland’s development co-operation, and has been growing in prominence in recent years. This is reflected, among other things, in the support of the Icelandic government for UNIFEM and UNICEF.

Non-governmental organisations do invaluable work in the developing countries. In line with the objective of strengthening co-operation with Icelandic non-governmental organisations work is now in progress on drafting working procedures which will form the basis for increased co-operation.


Madame Speaker,

As before, the Foreign Minister’s report to the Althing reflects the wide scope and varied nature of the tasks undertaken by Iceland’s foreign service, often in difficult circumstances. The general trends of international affairs and growing Icelandic commercial interests around the world will unavoidably place an even greater strain on the foreign service in the coming years. It is therefore important to prioritise and to aim at all times for maximum efficiency. It is in this spirit that increased emphasis will be placed on the preservation and promotion of Icelandic interests in Asia in the coming years, as the increasing political weight of the Asian countries and their tremendous economic growth have the effect that Iceland has both much to seek and much to offer in those countries. Among other things, an Icelandic embassy will be opened in India next March and it is hoped that an Indian embassy will open in Iceland next year. As before, attempts will be made to keep the costs of these changes at a minimum, e.g. through reassignment of tasks. The new embassy in New Delhi will at the same time represent Iceland in other countries of this region.

Obviously, a discussion of foreign and international affairs could take up much more room than the parliamentary procedure of the Althing will permit for this report. As before, Iceland’s foreign policy is founded on the preservation of Icelandic interests and active diplomacy toward other countries. However, it has also been a prominent trend in recent years that in addition to the direct protection of their own interests, Icelanders are playing an increasing role in international endeavours which do not have a direct bearing on Icelandic interests. It is our duty, and should be a matter of pride for Icelanders, to participate actively in international co-operation for the furtherance of freedom and democracy in the world.


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