A regional coupled ocean-atmosphere-ice general circulation model for northern Europe is introduced for climate study purposes. The Baltic Sea is interactively coupled. The coupled model is validated in a 5-year hind-cast experiment with a focus on surface quantities and atmosphere-ocean heat fluxes. The coupled sea surface temperature matches observations well. The system is free of drift, does not need flux corrections and is suitable for multi-year climate runs. With flux forcing from the atmospheric model the regional ocean model gives sea surface temperatures statistically equivalent to the uncoupled ocean model forced by observations. Other oceanic surface quantities do not reach this quality in combination with the current atmosphere model. A strong dependence of sea ice extent on details of the atmospheric radiation scheme is found. Our standard scheme leads to an overestimation of ice, most likely due to a negative bias of long-wave radiation. There is indication that a latent heat flux bias in fall contributes to the ice problem. Other atmosphere-ocean heat fluxes are generally realistic in the long term mean.