Reykjavíks dangerous flirt with the Mullahs

There is a billboard on the Kurdistan Highway in Tehran, and it should be keeping people awake in Reykjavík. It is enormous, unmissable, and it carries a quote attributed to Iceland's Minister for Foreign Affairs, Þorgerður Katrín Gunnarsdóttir: "Cowards are those who obstruct humanitarian aid." Those were her words when she publicly supported Iran's intentions to destroy the state of Israel.

That the Islamic Republic of Iran — a regime that funds Hamas, arms Hezbollah, trains the Houthis, and has spent four decades perfecting the machinery of state-sponsored terror — has decided that the words of a Nordic foreign minister are precisely what its propaganda apparatus requires should tell us something. It has printed them. It has placed them on its capital's most frequented highway. It has folded them into the visual language of a state that thrives on framing Israel as the villain, the West as complicit, and itself as the righteous voice of the oppressed. This is not an honour. It is a humiliation dressed up as a compliment, and it did not happen by accident.

Tehran did not choose Gunnarsdóttir's words because they were wise. It chose them because they were useful, and they were useful because they fit a pattern that has become impossible to ignore for anyone watching Iceland's foreign policy over the past two years. Two weeks ago, Gunnarsdóttir stood at the United Nations General Assembly and delivered a speech that made headlines — not in a way that served Iceland, but in a way that served Iran. She called world leaders "moral cowards." She accused them of blocking humanitarian aid. She took a conflict of almost unfathomable complexity and reduced it to a morality play with a clear villain and a clear hero, and the villain, conveniently, was the West. A week later, she summoned the United States ambassador to Iceland to protest a social media post by President Donald Trump. The post was a map. It was stupid and provocative, but it was also, by any rational measure, not the most pressing diplomatic crisis facing a NATO ally in the North Atlantic. She treated it as though it were. She declared it "entirely inappropriate," and Prime Minister Kristrún Frostadóttir piled on, calling it "absurd" and an "insult." Together they transformed a juvenile provocation into a full-blown diplomatic incident, damaging Iceland's relationship with its most important security guarantor in exchange for a headline and a moment of performative outrage.

That is not foreign policy. That is theatre, and the ticket price is being paid by Icelandic taxpayers.

But the billboard in Tehran is only half the story, and the other half is far more uncomfortable. The minister of foreign affairs is the centre of various scandals in Iceland's politics and economy. Gunnarsdóttir's husband, Kristján Arason, is in Iceland a person of dubious reputation. He is a former professional handball player turned banker, notorious for a bank scandal that cost Icelandic taxpayers hundreds of millions: he obtained a loan of several hundred million from an already bankrupt Icelandic bank, using questionable methods, failed to repay it, and the losses were covered by the public. According to investigative journalists, those circumstances turned Arason and Gunnarsdóttir into one of the wealthiest couples in Iceland almost overnight. A recently published investigation also revealed that Arason and his company are suspected of money laundering and large-scale tax fraud using complex corporate structures and financial transactions. Last year Gunnarsdóttir imposed "sanctions" over a foreign investor in Iceland because he refused to sell his company to her husband and, de facto, expropriated the company. This is the man who stands beside Iceland's foreign minister. This is the man whose financial dealings have been the subject of repeated investigative scrutiny. This is the man whose wife is supposed to be representing Iceland on the world stage, and the Prime Minister has said nothing — not a word.

Kristrún Frostadóttir, Iceland's youngest-ever prime minister, has not demanded an explanation, has not asked her foreign minister to step aside, and has not addressed the allegations publicly. She has simply let it fester, and the reason is not difficult to discern. Gunnarsdóttir leads the Reform Party, the coalition partner whose departure would bring down the government; she is the primary face of Iceland's pro-EU movement. In August 2026, Icelanders voted against resuming EU accession talks — narrowly, 52.8 percent against and 47.2 percent in favour — but it was a clear rejection of the path Gunnarsdóttir had championed. Her signature project was defeated, and yet she remains in office, remains in the spotlight, and remains the face of Icelandic foreign policy on the world stage, speaking at the United Nations, summoning ambassadors, and making statements that are celebrated by the Mullahs in Tehran. Frostadóttir, inexperienced and cautious, does not want to be the prime minister who brought down her own coalition, so she lets her foreign minister embarrass Iceland, summon the US ambassador over a social media post, while the minister's husband faces allegations of corruption, and speak at the UN in ways that Tehran finds useful. This is not leadership. This is abdication dressed up as coalition management.

The Islamic Republic of Iran knows exactly what it is doing. It has taken Gunnarsdóttir's words and placed them on a highway because those words serve its interests, because they can be used to paint Israel as the villain and the West as complicit while the regime that arms terrorists, oppresses women, and executes dissidents presents itself as the moral voice of the oppressed. The billboard is a mirror, and what it reflects is not a principled foreign minister standing up for humanitarian values, but a politician whose rhetoric aligns perfectly with the propaganda needs of a regime that has spent four decades destabilising the Middle East. Gunnarsdóttir is not a villain. She is something worse for a small, vulnerable country: a liability, a foreign minister whose personal scandals, financial entanglements, and ideological posturing have made her a useful tool for Iceland's adversaries and a source of embarrassment for its allies.

With Gunnarsdóttir, Iceland turned out to be a risk for its allies. Moreover, Gunnarsdóttir, the country's leading politician, turned out to be a liability for Iceland itself.

Written by Freya Stensrud freya.stensrud@alpineweekly.com