Iceland central bank: euro adoption depends on Eurozone crisis

Iceland european unionThe head official of Iceland’s central bank has said that whether or not his country adopts the euro will depend on the outcome of the current eurozone crisis.

Governor Mar Gudmundsson said on behalf of the Iceland Central Bank (Seðlabanki Íslands) that Iceland’s effort to become a member of the eurozone could not take place until both the euro and the Icelandic krona have finally stabilised.

He said, “Icelanders now have to seek clarification on two options: Whether the Eurozone manages to resolve its crisis, on the one hand, and whether Iceland manages to build a better framework around the krona. So this is a race between a better krona and a better euro,” Bloomberg reports.

He added that a stabilised krona, “will also be of use for us if the EU accession process leads to Iceland deciding that the country wants to join the Eurozone. Of course, we won’t know what happens in that regard for at least two or three years, and by that time the Eurozone may well be completely different from what it is today.”

The news comes amid the third year of the ongoing Eurozone crisis and following the North Atlantic nation’s impressive rebound from the 2008 Iceland banking collapse. Experts say that such events have propelled the massive fluctuation of the Icelandic krona in recent years.