Last week, the economic blogosphere lit up with a report from The Globe and Mail that Canada’s ambassador to Iceland would address the possibility of Iceland replacing its beleaguered currency, the króna, with the Canadian dollar. When the story broke, the speech was cancelled, but economic commentators have been discussing the possibility ever since: should Iceland replace the króna with the loonie?
In a week when Iceland also opens an unprecedented trial against former prime minister Geir Haarde over the 2008 financial crisis, it perhaps goes without saying that finance and politics go hand in hand in the tiny nation. When the crisis hit in 2008, Iceland realized how things could horribly, massively wrong in a global economy with a currency used by just 300,000 people in a country where every single bank has been wiped out virtually overnight. Continue reading We’re all a little loonie