Iceland’s Minister of Justice Björn Bjarnason discussed the possibility of Iceland adopting the euro through special agreements with the European Union without joining the union itself on his blog on Saturday, and his comments have sparked a debate.
Bjarnason said that by adopting the euro Iceland would add the third pillar to its cooperation with the EU, the other two being Iceland’s membership of the European Economic Area (EEA) and the Schengen Agreement, Fréttabladid reports.
Bjarnason’s comments are considered interesting because representatives of the European Central Bank (ECB) have expressed their disapproval of Iceland potentially adopting the euro without joining the EU and Prime Minister Geir H. Haarde has already ruled out the possibility.
“According to the information I have, it is impossible,” said Foreign Minister Ingibjörg Sólrún Gísladóttir, explaining that even though there may not be any legal hindrances, the EU does not approve of Iceland taking a “shortcut” to the euro. “We have been given a very clear message from the EU on this subject.”
Haarde held a press conference yesterday to discuss Bjarnason’s proposal. “We have considered it a distant possibility,” the prime minister said, adding that Bjarnason’s ideas also include the possibility of the ISK being linked to the currency rate of the euro (similar as the Danish krone), which will be looked into in more detail.
Bjarnason claimed that according to the 111th article of the Treaties of the European Union, the EU has the authority to make agreements with non-member states on adopting the euro. “I have said that there is not a lack of legal resources, but if there is a lack of political will, then that is a different story.”
Percy Westerlund, the EU ambassador to Iceland, said it is not possible to interpret the 111th article of the Treaties of the European Union in such a way.