Iceland’s European Committee, on which representatives of government parties, labor unions, Iceland’s industries and economy all have a seat, is currently in Brussels to discuss European Union regulations in relation to Iceland.

Illugi Gunnarsson, of the Independence Party, one of the committee’s chairmen, said the committee is keen on finding out whether there are any legal hindrances for Iceland to adopt the euro without joining the EU, Fréttabladid reports.

“The euro can only be adopted through European Union membership ,” the European Commissioner for Enlargement, Olli Rehn told Fréttabladid after his meeting with the Iceland committee yesterday.

Rehn added that if Iceland decided to apply for membership to the EU, negotiations would not take long—perhaps even less than one year—because Iceland has already introduced most of EU’s regulations through the EEA membership.

“He [Rehn] was very clear about a bilateral adoption of the euro and said there was neither the political will nor will among officials, and that we should not waste time on this issue,” said the committee’s other chairman, Ágúst Ólafur Ágústsson of the Social Democrats.

However, Rehn was not able to answer the committee’s questions on whether there were any legal hindrances for Iceland to adopt the euro without joining the EU as Iceland’s Minister of Justice Björn Bjarnason has suggested, claiming there are no laws forbidding Iceland making a special agreement with the EU on a bilateral adoption of the euro.

The committee will discuss that option further with Joaquín Almunia, the European Commissioner for Economic and Monetary Affairs, tomorrow. “Olli Rehn’s reaction was not surprising, we have heard it before. But if it is legally and technically possible, it is a question of politics.”

University of Reykjavík Professor Fridrik Már Baldursson said that informal euro-ization has already begun in Iceland, which may prove risky.

“Currently, approximately one quarter of household debt to the banking system and more than 70 percent of corporate debt is in a foreign currency,” Baldursson said.

“The banks have insured themselves against the fluctuations of the króna, but undeniably have to face a higher risk when granting loans. The euro-ization therefore jeopardizes financial stability and in most ways it represents a negative force for the economy,” Baldursson explained.