The Canadian ambassador to Iceland says that the authorities in Ottawa are willing to start talks that could see the Canadian dollar become the national currency of Iceland – if that is the will of the Icelandic people.
The ambassador, Alan Bones, will give a short speech at tomorrow’s meeting of the Progressive Party which will discuss the unilateral adoption of another currency to replace the Icelandic króna. RÚV reports the ambassador as saying that his government is ready to discuss Iceland’s adoption of the dollar if the Icelandic government requests such talks.
He said that an eventual treaty would try to accommodate the best interests of both governments; adding that if Iceland adopted the Canadian dollar unilaterally its government would obviously have no say on monetary policy – making it in the country’s interest to negotiate a treaty beforehand.
There are many examples of countries unilaterally taking on the currency of other nations – although no country has chosen the Canadian dollar to date.
Alan Bones says it falls to the Icelanders to discuss the matter internally and decide if the benefits of a stable currency outweigh the negatives of losing control over monetary policy and losing the ability to deal with economic shocks, as in autumn 2008, by devaluing their currency.
There has been serious discussion in Iceland about ditching the króna since the crash and one of the key reasons for Iceland’s EU application is the possible eventual adoption of the euro. Others have been calling for the country to take up other currencies, and the Canadian dollar has been a popular choice. Still other voices maintain that the expense and instability of the króna are inconveniences worth enduring for having control over monetary policy and the ability to devalue.
Honestly Canada don’t give a damn about the Oil Sands, we currently talking about a LOT more petrol in the north but you don’t know about it right? Canada is now the number one destination for immigration from Europe mainly due to the EU crisis. Google a bit I’m sure you’ll find some information about it the web…..
@SirEuro, maybe in Canada there’s currently an SMALL economic crisis, but it’s directly due to the US bad economic status, not because Canada didn’t manage its finance correctly! You seems to know a bit about economic so you should know that roughly 80% of the Canadian exportation and importation are done with the US, but since 2008 things have changed a lot. The Canada is going to adjust some of the excessive financial leaks around the country particularly within the government employees and in few years we’ll be back. Not to mention that Canadian dollar is currently even with the US dollar which is still the best currency in the whole world and of course by far better that the euro. You’ll see the euro will disappear in ten from now!
Marc . Yes I am serious, Iceland wont be allowed to get into the EU, therefore adopting the Euro is not an option. I don’t think you understood my comment. I am saying that Iceland cannot get into the EURO club. We have got a couple of problematic economies that are being fixed, adding Iceland to the club wont help, just because the Icelandic debt is Huge, compared to its population.
Even with the crisis in Europe the Euro keeps being one of the strongest currencies in the world… even stronger than the US dollar or the Canadian dollar. All that Canada has is sand oil, that is a primary resource that needs a lot of process, it is not like in the arab emirates where you dig a hole and the oil pops up. The Canadian oil requires a lot of investment and effort, and it really does not leave such a great benefit for the country, at least not in the percentage of Norway or the Arab countries. Canadian economy is not updated, many industries are moving away from the country to the US, Asia, South America, you name it.
Unemployment in Canada is growing very fast. Now the canadian government is going to cut 19.000 Jobs!!! That sounds like economic crisis to me. Now with growing unemployment, problems to process and sell the sand oil, old transportation system ( Canadian trains are museum pieces compared with the fast speed trains we have in most of the EU), it wont be long until the bank start defaulting and requiring bailout, just because of people not being able to pay mortgage in Canada. It is going to be the same or worse than in US. The Canadian dollar will devaluate A LOT, and go for 1euro=2 CAD next year. Everyone knows that… now, if Iceland adopts the loonie, things wont be much better for Iceland.
Canada is in very bad shape, and admiting defaulting countries, that have been bailed out by the IFM is not going to make things better….
Here is an article from today on the topic, in Embassy magazine from Canada. “Iceland should adopt the Canadian dollar”
http://embassymag.ca/page/view/meadows-03-28-2012
Interestingly, a number of Investors and politicians have have talked about the need for Iceland to adopt a new currency, like the Canadian dollar for example.
Not one of them has ever explained how that would be possible, and no one seems to wonder why that is.
Even if we would convert our entire currency reserves to Canadian dollar, and then exchange it with Kronur, we would still be short by a considerable amount.
We would have no monetary policy control and no currency reserves.
This could only be done with a huge loan, billions of dollars.
I am sure the people who are pushing this, would help Icelanders get such a loan.
They would use natural resources as collateral, or sell them to entrepreneurs, like Bjorgolfs.
It should also be noted that the IMF did lend to Iceland to boost the currency reserves, from zero after going trough the hands of David Oddson, to the current amount.
It is intended for this purpose, and nothing else.
Some fresh news for Iceland, here is the big love from England about your EU membership! Remember this, Canada is your best friend…
http://www.independent.co.uk/news/world/europe/mep-in-protest-over-iceland-eu-membership-7566928.html
@ Fisy.
Remember Gummi’s Peppermint Schnapps Joke.
Notice what the guy in the red sheep’s clothing is drinking ;)
http://www.youtube.com/watch?v=jmSghBdVs24&feature=related
He is a troll, just messing with you for fun.
He may have a point though with the newest joke, Fisy 1.0.
Except a completed version would have less errors, so Fisy 1.0b could be more likely :)
@Bromley86 alright then, I didn’t get your point the first time…….
@Bromley – to me it seems that the euro is a abbreviation of the Norwegian phrase “europeisk uro”.
>Dude, the EURO is a currency, why are you talking about an eventual acronym?? Where is the confusion?
This:
“Would you like your change in pounds, dollars or euros?”
Rather than:
“Would you like your change in POUNDS, DOLLARS or EUROS?”
Not a big deal though.
@ Peter London/Krakow following your link, I understand that the majority of Icelanders (56.2%) thinks that joining the EU is a bad idea. Well this percentage will eventually increase with the actual mess in the EURO zone.
>And it’s “euro”. It’s not an acronym (i.e. European Union Rules Okay or whatever) so you don’t capitalise the whole word.
Dude, the EURO is a currency, why are you talking about an eventual acronym?? Where is the confusion? (EU= European Union; EURO= EU currency)
>And yes Greece is happy that Germany keeps the EURO strong!!
Seriously? Sure, in the past they liked the access to cheap money, but I suspect that they’re liking that a little less now. And the inability to devalue (which a Euro lacking Germany would naturally do) is patently hurting Greece. Not that the lying b*****ds don’t deserve it mind, but that’s a different matter.
And it’s “euro”. It’s not an acronym (i.e. European Union Rules Okay or whatever) so you don’t capitalise the whole word.
Wario, Germany is as guilty as Greece and the other PIIGS. They have exploited the Euro as much as Greece and are far ‘luckier’ than Greece in that they have been able to build a solid industrial base using the Euro.
The fact is the Euro problem would be solved if Germany left it.
PM says the Krona must/will go..
http://www.bloomberg.com/news/2012-03-10/iceland-will-adopt-euro-or-other-currency-prime-minister-says.html
Logically the Euro is the only choice, the mechanisms exist to accept other countries into it and support will be available from the ECB.
This is assuming that the PIIGS leave and only solid N.European countries remain members of the Euro.
@Bromley86, there’s a different between being kicked out of the EURO and leaving the EURO for an other currency! And yes Greece is happy that Germany keeps the EURO strong!! The southern country are more a nuisance than helping Germany. Greece was lucky enough to use the EURO for a couple of years but it will end soon! Greece shouldn’t be part of the EU and EURO because they lie on their real financial situation. Angela Merkel is the one who said that Greece falsify their admission to the EU and EURO! I’m sure you all already ear that before…….
>If Germany drops the EURO, the EURO its self will devalue pretty fast
Surely that’s precisely Peter’s point? Or do you think Greece is happy that it has a strong currency?
Germany’s manufacturing sector has benefited by having the southern Europe countries holding down the value of the currency in Germany.
@Peter London1Krakow you can’t be serious! Germany is actually the one which keeps the EURO alive. If Germany drops the EURO, the EURO its self will devalue pretty fast because right now Italy, Spain, Portugal, Greece, Ireland…..to name only those, are the one that have to kick out of the EU and the EURO. By the way, there’s no hard feelings in business!
@Wario
German has no right to complain about the Euro, the are the major beneficiaries of it and the root cause of the Euro’s problem. Germany should be kicked out of the Euro to save it.
@Bromley I know all, I see all. I am the serpent. You are the servant of the serpent. Kneel.
@Peter – London/Krakow both are not viable, the EU and the EURO. I didn’t focus on the EURO particularly but I will. Look at Sweden, they’re part of the EU but have their own currency, Norway isn’t part of the EU and of course has its own currency as well. The big difference between the two is that Norway is god damn happy to be out of this mess, while Sweden wishes to leave the EU for good. Germany regrets to be part of the EU and having traded the German Marks for the EURO which is now a nightmare for Germany and the European economy right now!
So it is ”claimed” my dear Peter.
@Fisy. Out of interest, whose good authority was it?
“Angela Merkel politely is the first to say that the EU is not viable in long term. There’s a ridiculously huge gap between Germany and Greece right now ”
Many people can’t tell the difference between the EU (a group of countries) and the Euro (a type of currency unit – so it is claimed).
Just for those new poster here about Gummi :
https://www.icenews.is/index.php/2012/01/05/iceland-among-the-happiest-nations/#comment-556529
I’m currently finishing my Financial Degree in University and after that I’m leaving for Iceland. Since the crash of 2008, Iceland needs to get back on its feet and being part of EU is not a good choice. Angela Merkel politely is the first to say that the EU is not viable in long term. There’s a ridiculously huge gap between Germany and Greece right now and between you and me, always been like that since the beginning of humankind. Now why Iceland would join the EU while Germany (the richest country in the EU) is trying to escape this mess! No need to study in finance to understand that a country which focus on a good device and strong economy needs to handle it self alone, yes I said alone! Iceland is sleeping on many treasure and to get the maximum of it, you need to find another way to associate yourselves with Canada or maybe Norway. It can be long to explain why Canadian dollars is better than the Norwegian Krona but both are a good exit. Enough said now………big love to Iceland!
@Gummi you said ”lesser nations”, can you explain yourself because from here it sounds like a complex of superiority!
If you did not know better you would think I did write my post just to get Gummi to post.
But of course I am a robot not a free man !
Where is Mike UK Nordic Analyst when we do expect him ?
Fisy proclaims his feelings: “..and Icelanders have good feelings about Canadians.And same towards British too.”
No need for these maudlin emotional demonstration, Fisi! We’ve proven our love for the lesser nations. Did our President not encouraged them to leave their money with us? Finest bankers in the world? All deposits impeccably insured?
That is true love, my friend.
Gummi
Sure I’ll welcome Iceland, I think Canada should also, Buy Alaska. And before Alaska ,Canada needs to Buy a few South Pacific Islands
Sure I’ll welcome Iceland, I think Canada should also, Buy Alaska.
Fisy 1.0 did say: “The horrible treatment from Brown and Darling will not be forgotten”
Well said Automaton FISY 1.0!!
Never will we forget their terrible treatment.
Our feelings were hurt.
I suggest we bankrupt a few thousand more of their pensioners to get even.
P. S. And there are many good natural resources company listed in Toronto that could help us with our oil and gas exploration in Dreki if by some twist of fate deal with Norwegians do not take most of the slots.
Canadian_chap wrote ;
” I hope Iceland and Canada continue to increase our already excellent economic and political cooperation – we have many interests in common and a lot to offer one another. ”
It is certainly true and Icelanders have good feelings about Canadians.
And same towards British too. The horrible treatment from Brown and Darling will not be forgotten but we realize that they were Scots and that Scots are not the only people making up Great Britain and that Brown and Darling do not represent Scottish people any more than current Red-Green minority coalution represents will of Icelandic people.
What every country does need this day is more local democracy.
Not the silly implementation of referendums in California USA but like they do have in Leichenstein and Swiss.
Michel amm – We do not print $$ here in Canada. The Bank of Canada is owned by the people of Canada which sets monetary policy and interest rates for the the Canadian people. It does not print dollars to increase the money supply. This is done throught the private banks via fractional reserve banking policies. No different than other western countries of Europe or the US.
Yes we have our difficulties economically speaking with the current economic conditions globally, but we have fared well in comparison to Europe ot the US. Our dollar is now considered a petrol dollar, which affects our industrial heartland as we our finding it difficult to compete with China and other BRIC countries.
As for your statement about being slaves to the banksters…you tell me what countries are not slaves to the banksters?
I am not saying Canada is perfect in any way, but I don’t mind sharing our currency and monetary policies with Iceland!
Of course most Canadians would embrace Iceland adopting the Loonie. Most of us are friendly, helpful, and respectful. But before you get too excited, let me tell you a little about my country that you might not know.
Our mainstream media is directed by big money. It is filled with propaganda and seldom presents both sides of a story. Even our “national” media, CBC, is 25% funded by advertising. For alternate Canadian media you might want to start with rabble.ca
One indictment of our purported “democracy” is that many Canadians suspect something is wrong, but feel powerless to fix it. You can see this in most government story comments on cbc.ca/news
Our democracy is directed by corporations, and rarely are people’s needs placed before profit. Political parties, and discussions of their differences, maintain the illusion of democracy to divert the people from real issues. Governments come and go, but the bureaucracy remains and long term policy direction is dictated by large corporate interests such as the Canadian Council of Chief Executives whose members, including bankers, control 40% of all corporate assets. Our politicians swear oaths to the Queen, not Canadians. Our successive governments, regardless of the party, continue “standardizing” our laws and regulations with the USA. For example: NAFTA, borders, copyright, surveillance, jails.
Our banks might seem to have avoided the Crisis, but they received $186 billion, about the same %GDP received by the US banks. Google canadian bank bailout. Bank of Canada is national, but politicians nor the public have any say in policy. That is controlled by the largest preferred stock holders of our 5 largest banks. I don’t think the Bank of Canada has ever been audited. With all the shadow banking and off balance sheet banking in the US, I can’t image Canada being much different.
I arrived here understanding that Iceland was a model for putting people’s needs ahead of financial markets. Mr. Grimsson seems to strongly support true democracy. I had hoped to find your government creating its own interest free debt, but still you are to be congratulated on your approach to the saddistic banking crisis. Canadians and Icelanders are free right now to trade. We don’t need far reaching treaties. We need to increase regionality to protect sovereignty. Collectivism is too easily corrupted. I hope you keep the króna. Two things we could do together: leave our respective free trade agreements, and leave NATO.
Peace my brothers
Icelanders don’t do that.
Dont give your credit power to strangers.
If Iceland does that, the canadian central bankers (wich are not canadians) will just print a lot of money and will buy all your officials, and then your country,then in a few years you will be the slaves of the banksters.
Read the book : “The Lost Science of Money”.
You will understand why and who is behind this proposition.
@Sir Euro
oh its hard to read such ignorance…
“Canada is a country where they use trains from the last century and have an obsolete industry. They are trying to boost the economy with oil, but that is being a big problem since the US doesn’t allow the pipeline down there. Now they want to divert it to the west to try to sell that oil to the chinese… Even if Canada seems to be a balanced economy, the truth is that the country is facing lots of problems which have no easy solution, increasing unemployment and many other things.”
Trains: Canada is a very very large country that is sparsely populated. The country as a whole has its largest metropolitan centers very much spread out. Passenger rail service has never been popular. Not now, and not when the trains were shiny, current and new. I would say that by NOT pouring money into its rail systems Canada is playing it smart. Canadians should be thankful that you are not getting close to their expenditures. As far as the metropolitan areas who need it, they have sufficient transportation systems, including good Metro-type systems. But I really do not think many other people (other than yourself) will be worrying about the rail systems. Sadly anyone wanting to take a grueling multi-day day rail journey in a modern train across Canada will likely need to wait. The freight train service in Canada will remain sufficient however.
I would love to hear you explain how Canada’s industry is obsolete. That is just a thick headed, ignorant statement. If youre trying to sound smart you are failing miserably.
Canada is TRYING to boost its economy with oil?? In actuality Canada’s economy has been extremely boosted by its oil industry. (stats i found place Canada as the 6th largest oil producing country in the world, with the 3rd largest proven resources.) The pipeline would have boosted that much higher, and surely they will find alternative ways of boosting it to incredible proportions. For now, however, 6th in the world for production sounds good. The phenominal resources can surely wait.
Canada is indeed the largest exporter to the US. And as the US’s industries flatline, there will certainly be an effect. Perhaps they will be more dependant on Canada’s industry. Perhaps current importers from the US will increasingly look towards Canada as well. I know the gov’t of Canada has been working hard at developing ties and trade agreements with other nations.
As far as unemplyment goes, the Canadian rate has fared very well. Certainly much better than the EU. Not only by overall percentage of unemployment but also by percentage of increase and instability since the global crisis began.
Get it right next time pal.
I as a Canadian think it’s a good idea, it would definitely increase business and tourism from Canada to Iceland. I would love to visit Iceland and learn the language too. :)
@Sir Euro: Are you serious? Adopting the Euro would be the end of Iceland, that currency is on the verge of collapse. It’s one thing what the value of the Canadian dollar is, it probably won’t ever go back down to the levels it was back in the 1990’s as the Canadian resource sector is becoming to strong. Canada is an energy super power, and Canada has more in common with Canada or the Scandanavian countries then they do with mainland Europeans. The British and the Dutch don’t like Iceland as Iceland never repaid them after their banking sector collapsed, the German and French Eurocrats will want to bully Iceland into the EU Zone so that they can control them and blackmail their policies if Iceland wants to adopt the Euro.
Iceland and Canada also have other economic interests which could be explored. Canada would probably be more than willing to let Iceland have some say on economic policy, as they could sign a treaty. Also Canadian investment would certainly shoot up, and having Canadian currency would encourage tourism from Canada. In fact Canada is probably the one tourist market they could really boost, as Canada has the largest Icelandic population outside of Iceland. On top of the Canada and Iceland could make partnerships to help boost the fisheries and fight those pesky trawlers from Spain and other European nations who illegally fish in their waters. Also unlike the Europeans who would be indifferent towards Iceland and just see it as another weak member to be bullied around, Canadians like and care about Iceland and would legitimately like to see them succeed.
Adopting the Canadian dollar and strengthening ties with Canada would be very beneficial to Iceland, and allow Iceland to maintain it’s independence from the Eurocrats. It should also be noted outside of Iceland, Canada is (I believe) really the only country that offers the opportunity to take Iceland Language and Culture at some of its universities. Strengthening ties with Canada may encourage Canadians to learn Iceland as a foreign language, and help promote and keep Icelandic culture going and even economically viable. I suppose Norway would be a good option too, but I still think Canada has just as much to offer Norway if not more. Iceland-Canada-Norway should all increase cooperation.
That’s just my opinion as a Canadian though. :)
Wow, it seems that Fishy is ready to abandon its usual icelandic proud for the american dream… Icelanders seem to be ready to loose all of their economic independence and autonomy just because they are not allowed to form part of the EU club, where they would have their share in the political decisions… The worse part of all is that Canada is directly dependent on the US economy ( a country that has a lot to go to updated its technological industry). Canada is a country where they use trains from the last century and have an obsolete industry. They are trying to boost the economy with oil, but that is being a big problem since the US doesn’t allow the pipeline down there. Now they want to divert it to the west to try to sell that oil to the chinese… Even if Canada seems to be a balanced economy, the truth is that the country is facing lots of problems which have no easy solution, increasing unemployment and many other things.
Even with the debt crisis going on in Europe the Euro keeps being very strong against the dollar. Being hones, no one has confidence in a country that has bailed its banks twice with printed banknotes for more than 750 billions each time and have trillions in debt. The US is sinking, and that is affecting Canadian economy. Harsh times are at the doorsteps for Canada. And that only could make worse the situation in Iceland….
Once again, I say that the best bet for Iceland it to loose some of its sovereignty ( economic and financial) to NORWAY, and adopt the Norwegian Króna. Iceland should ally with Norway and try to find oil in the Icelandic waters between Iceland and Norway.
The problem here is the same as always, the local icelandic mafia does not want to loose its power. They have taken around the icelandic people, ruined the country and they are still there…
I feel so sorry for icelanders…
This storey has generated an unexpected interest in Canada, with numerous expressions of admiration and warmth ( excepting a couple of the usual trolls) towards Iceland and her people. There seems to be an approving nod towards the method used to deal with banksters.
http://www.cbc.ca/news/world/story/2012/03/02/iceland-loonie.html
http://www.theglobeandmail.com/report-on-business/economy/currencies/canadian-envoy-to-iceland-sparks-loonie-controversy/article2356634/
Are you nuts, icelanders?
Sometime you do not have the choice but to adopt someone else currency. For the reasons we know Iceland must adopt someone else currency and hope its choice will serve the country best interest. Choosing the Canadian dollar seems to be a good choice. We both have lot of similarities and probably a lot to share. Canadian bank system is strong and was not really affected by the economic crisis. Using the Canadian dollar will jncrease confidence between Iceland and its ‘business partner’!
You’ve got to be kidding me. Hasn’t Iceland had enough neoliberal trash? There is NEVER any good reason for surrendering one’s currency sovereignty. Anyone who tells you otherwise is in league with the bankers that brought Iceland to its knees. Wasn’t once enough?
The Canadian dollar has not historically been a very stable currency. I would be interested to know what the economic implications would be if Iceland were to adopt the Canadian dollar at its current value (127kr = $1) and afterward it worked its way back down to a previous rate (for example 14 years ago $1 CAD costed 51kr)
It would be interesting to know how such a turn of events would affect things in Iceland.
Iceland should think carefully about giving up control over monetary policy. The troubling situation with so many European national economies provides a good example of what can go wrong.
Aside from that, I hope Iceland and Canada continue to increase our already excellent economic and political cooperation – we have many interests in common and a lot to offer one another.
Hmmmm interesting. Maybe meetings could be held in Iceland & Gimli Manitoba.
If not the ISK then better the Loonie than the USD.
EURocrats would not let us take the EUR officially without EU member state hood. Although it is just about building up our foreign reserves of EUR if we wanted to use it.
We are part of SEPA as well as SWIFT here in Iceland. So it is easy enough for us to work with EUR as any EU member state.
But being under the thump of central bank and interest rate policy of other nation is not so smart. Better we keep the ISK.