From Iceland — Wants To Re-Invent Icelandic Crown

Wants To Re-Invent Icelandic Crown

Published April 30, 2012

Member of parliament and chairperson of the new party Solidarity Lilja Mósesdóttir wants Iceland to drop the crown, and adopt a new currency called the Newcrown.
Iceland’s króna has been struggling to regain its original value since the 2008 crash, without much success. This has led to some people speculating on what other currency Iceland could adopt instead. Recently, Iceland made international news when Canadian ambassador to Iceland Alan Bones confirmed that the Central Bank of Canada was ready to talk to Iceland about adopting the Canadian dollar. The idea was later scrapped when Canada learned it was only one of Iceland’s opposition parties, the Progressives, who were interested in discussing the possibility.
Now Lilja Mósesdóttir – herself an economist and chairperson of the newly-created Samstaða – has taken the novel approach of suggesting Iceland re-invent its currency altogether, doing away with the crown and adopting what she dubs the Newcrown (Nýkróna). She speculates that when capital controls are lifted, a snowball effect of devaluing will start to drag the crown further down. To head this off, she believes Iceland should create a new currency, pinned to a particular exchange rate, and gradually move towards adopting it.
Iceland is in accession talks with the European Union, though, and entry will mean adopting the euro. As such, it is not likely that the current government will consider Lilja’s proposal.

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