Nobel Prize winning economist Paul Krugman, speaking at a conference in Iceland yesterday, told those in attendance that he finds it difficult to understand why Iceland is interested in the euro, saying that it is no solution.
Many Icelanders have begun to regard their own currency as weak and unstable, susceptible to making great fluctuations brought on by even the smallest ripple in the global economy. The Confederation of Icelandic Labour Unions have suggested the government pin the Icelandic crown to the euro in order to stabilise the currency.
Paul Krugman disagrees. Speaking at a conference hosted by the Icelandic government and the International Monetary Fund (IMF), he said he did not understand why so many were interested in taking up the euro as soon as possible. He pointed out that Iceland’s recovery from the financial crash has shown the advantages of having a more flexible currency. In fact, he added, Iceland is faring better than many of the countries who use the euro.
Krugman’s entire speech can be seen here