Canada’s ambassador to Iceland Alan Bones will announce tomorrow that Canada is ready to discuss Iceland’s potential adoption of the loonie as its currency, The Globe and Mail reports:
Iceland, still reeling from the aftershocks of the devastating collapse of its banks in 2008, is looking longingly to the loonie as the salvation from wild economic gyrations and suffocating capital controls.
(…) A group of prominent Icelandic business leaders approached Mr. Bones last year about the idea. And his speech Saturday, to a meeting of the opposition Progressive Party, marks Canada’s first public response.
While Iceland would seem to have many reasons to adopt the loonie and ditch the volatile krona, Canada could also benefit. As both the Globe article and this piece by Canadian Business point out, part of the reason Canada might be open to talks with Iceland is because their adoption of the loonie would create a partnership with an Arctic nation. From Canadian Business:
The strangest reason for adopting the loonie is Arctic sovereignty. There are eight countries in the Arctic Council, including Canada and Iceland. A common currency could help Canada gain clout in the council, the group argues, and it could gain even more if Greenland comes on board, which they recommend.
Plus, let’s face it, we’re flattered by the attention.