Annual report on foreign and international affairs by the Minister for Foreign Affairs

Össur Skarphéðinsson, Minister for Foreign Affairs of Iceland, has submitted his annual report and address on foreign and international affairs to the Icelandic parliament, Althingi, his fifth since he took office in early 2009.

In the report's introduction the Minister thanks Althingi for the wide consensus reached on many important foreign policy issues, that at times have received unanimous support from the parliament. Mr. Skarphéðinsson mentions, for example, the fact that a broad consensus was reached on strengthening Iceland's commitments to international development, that Iceland's Arctic policy was unanimously approved, and that there has been good agreement on Iceland's interests in the mackerel dispute and Icesave case, after it reached the EFTA Court.

The report, which covers the period from April last year, states that:

• Arctic affairs have been a priority and considerable progress made on the issue since Althingi's agreement on Iceland's Arctic policy in 2011. Bilateral communication with other Arctic countries have greatly improved and the foundations for scientific research in the Arctic have been strengthened. The Arctic Council has become a more effective decision-making forum in matters concerning the Arctic region, and its permanent secretariat has now been established in Tromsö, Norway. Iceland's decision to open a diplomatic mission in Nuuk, Greenland, this year, further exemplifies the importance of Arctic affairs to Iceland as well as its commitment to increased cooperation with Greenland.
• A committee consisting of members of all parties represented in Althingi is working on proposals to form the basis of a new National Security Policy  for Iceland. Nordic cooperation on security has been firmly established with a historic declaration of solidarity, and in that regard it is of symbolic significance that Sweden and Norway have expressed their willingness to take part in air-surveillance in Iceland.
• Unanimous solidarity was reached in Althingi on Iceland's international development policy which meant an increase of over a billion ISK in this year's budget. This increase is a part of Iceland's goal of seeing 0.7% of GNI going towards Official Development Assistance in the year 2019.
• Iceland was specifically designated as the World Bank's main partner-country and source of advice in geothermal matters in a project aimed at the development of geothermal energy sources in thirteen countries in the East African Rift Valley. This is Iceland's biggest project in international development to date.
• In January Iceland was acquitted of all charges in the Icesave case before the EFTA Court. The ruling brought to close one of the most difficult issues facing Iceland in the aftermath of the 2008 financial crash. The EFTA Surveillance Authority brought the case against the Icelandic government for allegedly breaching the deposit guarantee directive as well as discriminating against foreign depositors. All of Iceland's main arguments in the defense were accepted in the judgment of the EFTA Court.
• The EEA-agreement grants Iceland access to its most important market and is the basis for numerous opportunities in the field of business, research, education and culture. However, there are signs that its functionality and validity may be in doubt as it constitutes a transfer of sovereignty which stretches the limits of Iceland's constitution.
• Iceland's interests in the European Union accession talks have been upheld with determination. Last year 12 negotiation chapters were opened and one closed. In total, talks have commenced on 27 out of 33 negotiation chapters and Iceland's negotiating position has been submitted on two more chapters. In accordance with the agreement between the coalition parties in Iceland on the continuation of Iceland's accession negotiations in the run up to the parliamentary elections this spring, no further work will be done before the elections on the establishment of Iceland's negotiating position for the four chapters on agriculture and fisheries that have yet to be finalised. 
• The Icelandic government has enthusiastically supported the Palestinian people's right to self-determination and the Palestinian issue has been a sign of the Icelandic people's dedicated fight for human rights. Iceland followed its recognition of Palestine's independence and sovereignty in 2011 by co-sponsoring Palestine's successful bid to become a UN Non-member Observer State.
• Free trade negotiations between Iceland and Chine are well underway. After a successful 6^th round of talks was held in China in January there are hopes that a free trade agreement will be signed in the near future which will create important business opportunities for Icelandic companies and strengthen the business cooperation between Iceland and China.
• The Ministry's operations have been within budget in recent years despite considerable budget cuts and challenging projects. The Nordic countries continue to look towards the joint usage of their embassies and missions around the world as this cooperation has proved successful in recent years.