I stumbled across this comment from Thorolfur Matthiasson on Paul Krugman’s blog. It explains the current situation in Iceland perfectly:
Finally, there are many big unsolved problems that face the government and people of Iceland.
First, the Icelandic Krona is not a viable currency in the world of free movement of capital. The Euro seems to be the only solution. That requires a membership in the European Union. Becoming member is a long and winding process of negotiations and self analysis.
Secondly, the problem of the public expenditure alluded to above must be solved.
Thirdly, the dispute with the Brits and the Netherlands over the IceSave problem must be solved.
Forth, debt relief for families and firms must be concluded in a satisfactory way avoiding the making of zombi firms and zombi banks but without committing to much of the public budget. No small tasks for a government with thin majority and gross internal disputes.
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Lino
1 year ago
if I’m not mistaken, Kosovo and Macedonia (sorry, FYROM) “have” the euro as “national” currency.
Iceland “could” too, overnight, if only… it had, well, enough euros…
TCF Financial 2Q net income soars | Personal services
1 year ago
[...] Situation in Iceland – The Fourfold Dilemma [...]
Lukas
1 year ago
Unfortunately you are mistaken. Both of these states have another currency…
Bromley86
1 year ago
Kosovo really do appear to use the Euro as their main currency:
http://en.wikipedia.org/wiki/Kosovo_and_the_euro#Towards_the_euro
I suspect Lino was mixing up Mac/Montenegro:
http://en.wikipedia.org/wiki/Montenegro_and_the_euro
Lino
1 year ago
YES! Bromley86 is right, I mixed up… I remembered some M*.* in the ashes of Yugoslavia and of course took the wrong M-something.
M-ontenegro it is: I stand corrected
http://www.gocurrency.com/countries/macedonia.htm