Iceland considering switch to Canadian dollar
A Canadian dollar, left, and a Euro are seen next to a series of U.S. dollars. (Paul Chiasson / THE CANADIAN PRESS)
Published Friday, March 2, 2012 9:52PM EST
Will ongoing economic uncertainty about the eurozone push Iceland into the stable arms of the Canadian dollar?
While the question may have seemed a loonie one only a decade ago, the idea has been gaining traction recently among Icelandic investors like Heidar Gudjonsson.
Gudjonsson is an economist at Iceland's Research Center for Social and Economic Studies.
He recently stated that Canada and Iceland share Arctic geography and export-driven economies. Gudjonsson also noted that Canada's sound economy is buffered by a wealth in natural resources like oil and water, making the loonie a stable long-term bet.
"Their export mix is very, very similar to ours," he said in November.
Iceland is still reeling from the 2008 economic collapse, which destroyed the country's banking system.
Now, with the eurozone facing ongoing debt issues, Iceland is looking west for a currency solution.
It seems Canada is also warming to an alliance between the two frosty nations.
Iceland's RUV media reported Friday that Canada's ambassador to Iceland will touch on the matter during remarks Saturday in Reykjavik.
Ambassador Alan Bones is expected to say that Canada is open to discussions over the plan.
While Iceland would lose their autonomy in terms of monetary policy if they ditch the krona for the loonie, Gudjonsson said last year that the move is a "sensible" choice.