Iceland has been desperate to replace its krona with a more stable currency since its banking collapse of 2008.
But instead of the obvious choices — the American dollar, the British pound or the euro — it seems Icelanders are eyeing our loonie. According to an article in the Globe and Mail, several Icelandic business leaders and some political parties have actually approached the Canadian government about adopting the Canadian dollar as their national currency.
"Canadian ambassador to Iceland Alan Bones had planned to deliver remarks to a conference on the future of the Icelandic krona, making it clear that if Iceland decided to adopt the Canadian dollar, with all its inherent risks, Canada was ready to talk," the article notes.
However, Bones' Saturday speech was cancelled abruptly.
"Once we got wind of [the speech] and it went through the approval channels ... The decision was made that it's not an appropriate event for him to speak at," Joseph Lavoie, Foreign Minister John Baird's press secretary, told the Globe.
Iceland was one on the hardest hit economies affected by the international financial crisis of 2008. The country's three top banks collapsed as the global credit crisis struck, triggering a deep recession, high unemployment and a wobbly currency.
Adopting the strong and stable Canadian dollar could certainly help with Iceland's recovery.
"There's a compelling economic case why Iceland would want to adopt the Canadian dollar," notes the Globe.
"It offers the tantalizing prospect of a stable, liquid currency that roughly tracks global commodity prices, nicely matching Iceland's own economy, which is dependent on fish and aluminum exports."
From the Canadian point of view, sharing currencies with Iceland would likely multiply our rather minuscule trade volume with the North Atlantic island nation.
The Canadian government refused to comment further. "Ottawa also said it doesn't comment publicly on other countries' currencies," the Toronto Star reports.
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