German-Icelandic relations are excellent and wide-ranging, encompassing politics, business, culture and sport. The two countries’ political relations are based on shared values and agreement on numerous current international issues. Iceland sees Germany as one of its key dialogue partners in Europe.

These ties were underscored in 2019 by Federal President Steinmeier’s state visit as well as a visit by Chancellor Merkel. The most recent visits to Berlin were by Icelandic Foreign Minister Thórdís Kolbrún Reykfjörd Gylfadóttir in August 2022 and Prime Minister Katrin Jakobsdóttir in January 2023.

Germany and Iceland also have close economic relations. In 2022, Germany imported goods worth 884 million euro from Iceland and exported goods worth 670 million euro in the opposite direction. This makes Iceland Germany’s 76th largest import market and 80th largest export market. Germany, meanwhile, is Iceland’s third most important supplier of goods and its sixth largest buyer. Iceland primarily imports machinery, fuel, lubricants, vehicles and chemical products, and exports fish and fish products as well as aluminium. Tourism also plays an important role. Most guests come from the United States, Britain and Germany. In the cultural sphere, the two countries enjoy a very lively and wide-ranging exchange in the fields of language and literature, the visual and performing arts, music, research and academia. Examples of this are the annual German Film Days in Reykjavík as well as the inclusion of German artists in the annual Icelandic music and film festivals.

The Goethe-Institut promotes the German language in Iceland as well as German-Icelandic cultural exchange. Since the closure of the Goethe-Institut in Reykjavík in 1998, Iceland has been served by the Goethe-Institut in Copenhagen. In September 2022, the Goethe-Institut for the first time hosted a series of pop‑up events (Goethe-Morph) in Reykjavík. Other institutions involved in cultural exchange include the University of Iceland’s German Studies Department and the Icelandic Association of German Teachers (German is an optional subject at secondary schools). Iceland co‑funded the establishment of a lectorship in Icelandic at Humboldt-Universität zu Berlin in March 2002.