Iceland cannot adopt Euro with joining EU, says Stark

Jurgen Stark, a Member of the Executive Board of the European Central Bank, recently spoke in Reykjavik on the subject of Iceland joining the EU.

According to a report by CEP News, Stark said that Iceland would not be able to adopt the EU currency without first becoming a member of the EU.

“Each and every one of the countries participating in the European monetary union has followed one and the same route towards the adoption of the single currency, based on the principle of equal treatment,” he explained. “A country must first be a member of the European Union before it can adopt the euro.”

Adopting the Euro without joining the EU has been considered a possibility by many in Iceland’s financial sector, primarily due to Iceland’s highly volatile currency.

Stark went on to say, “The EU has taken a negative position towards unilateral euroisation by a candidate country or a member state with a derogation. However, we would like to welcome the newcomers through the front entrance, and not via the back door.”

It seems unlikely that Iceland will go through that front door. Prime Minister Geir Haarde’s said this week that remaining outside the EU is profitable for Iceland because of the rise of new economic trading partners like India and China.

One of the main concerns faced by the government is controlling Iceland’s fishing resources, something that they will not be able to do as an EU member.