These past few years have been tough on Iceland, with the tiny, windswept country virtually going bankrupt in the financial crisis and having to take a bailout from the International Monetary Fund.
It’s been hit by soaring unemployment, business failures and massive currency volatility. And now it’s had enough.
The Canadian ambassador to Iceland, Alan Bones, was reportedly set to announce that the Bank of Canada is ready to begin talks about Iceland adopting the loonie as the new national currency instead of the krona.
The hope is that by moving to a larger, more stable currency, Iceland’s economy would enjoy some of the benefits, including better footing for international trade.
According to Reykjavik media, Mr. Bones was to deliver his message in a speech on Saturday at an event sponsored one of the country’s leading political parties. The Toronto Star later reported a denial from The Department of Foreign affairs, stating Mr. Bones will “not be participating in the Icelandic conference tomorrow on currency matters, and will not be speaking on the issue.”
With a population of 320,000, roughly the size of Windsor, Ont., Iceland has frequently fallen victim to sharp fluctuations in the value of the krona, with the currency nearly doubling in value between 2000 and 2008, and then collapsing after the failure of several of the country’s leading banks as a result of wrong-way bets on toxic assets.