There are still plenty of people who think that the adoption of the Euro is something Icelanders have a choice in.
But that would imply that there are still reasonable alternatives out there. Talks of the USD are unfavorable in the context of Icelandic trade vs. the trade it has with the European Union and the economic and structural volatility in the US is hardly convincing in comparison. A Norwegian Krona fetish seems to be hard to kill with extremists on both the right and left wing, but the composition of the respective economies are different and if sovereignity is really an issue then why should it be surrendered to a single country instead of a large coalition. Then there are others who seem excited at the prospect of becoming Russia’s new best friend, hardly a convincing strategy for the majority of Iceland’s citizens.
So the mantra of the increasingly backtracking political parties has been ANYTHING BUT THE EURO!
It has nothing to do with economics or Iceland’s best interests, but all to do with the special interests that the parties serve. The Icelandic “economic miracle” would have been harder to implement and sustain if Iceland hadn’t grabbed all the benefits that come with the European Free Trade Agreement, while resisting as much as possible giving anything back. The Viking Raiders and the fishing industry have an iron grip on the largest parties as has been evident in the revelations of political donations in the last few weeks.
Right now though the situation is such that if the Euro doesn’t come to Iceland then Icelanders will go to the Euro. The hoarding of Euro’s through the loopholes in the currency restrictions is a sign of how Icelanders want to keep their money safe. The movement begun years ago when people increasingly started borrowing in other currencies, to escape from the unhuman interest rates and punishing price indexation.
Adopting the Euro would be an incredibly easy task for the banking system in Iceland. Icelanders already have adopted it in their borrowing habits and those who can in wages and savings.
And if the Euro doesn’t come to Iceland then Icelanders will come to the Euro. By moving abroad which is becoming an ever more enticing option for ordinary citizens and business owners who don’t have clout within the political parties and have been enslaved by the ISK for too long.
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Physchim62
2 years ago
You imply that the ISK is dead: in which case we should look for the identities of those who killed it! The Ministry of Puffins has four prime suspects, just waiting for me to edit the posts.
On the other hand, the ISK will continue to exist for a few years yet, simply because Iceland needs help from outside and can’t afford to unilaterally adopt the euro. Why can’t people listen to the messages that were being sent even during the good times: “No euro without EU membership”. Other countries are willing to help out to alleviate the effects of the financial crisis, but aren’t willing to sign blank cheques to feudal overlords as some Icelandic politicians seem to want. I have the growing impression that EU membership would give sovereignty back to Icelandic citizens, and that that is the real reason why so many well-placed commentators are against it.
AKJ
2 years ago
the EEC does beckon and their Iceland will be able to exert the same influence that it does now. Re Fish, well the banks own most of the fish licenses (unless they can pay of their loans of course) and so may end up with the European holders of the Bank bonds anyway.