Ásgeir Jónsson, head of the analysis department of Kaupthing Bank, stated at a press conference yesterday that adopting the euro in Iceland and replacing the króna currency without EU membership would be a realistic and simple option.
With continued expansion of the Icelandic investment banks in Europe, adopting the euro is becoming both easier and more desirable, Jónsson said, Vidskiptabladid reports.
The prerequisite for such a move, Jónsson said, is that Icelandic financial institutions need to have the same access to liquid resources in the euro currency area as European institutes, and the state would need to secure its liquid resources in euros.
The state could secure its resources with a service agreement with the European Central Bank, though Jónsson found it unlikely that such an agreement could be reached without Iceland joining the EU.
Another option would be for the state to keep reserve funds in euros, Jónsson said, and secure access to foreign loans.
Adopting the euro in Iceland without EU membership could prove difficult if the EU is against the move, Jónsson admitted, yet said it would not cause Iceland to lose prestige.
Though adopting the euro is desirable, there are also disadvantages, according to Jónsson, since without its own currency, Iceland could lose financial independence.
