Unilateral Adoption of Euro Not Favored by EU Skip to content

Unilateral Adoption of Euro Not Favored by EU

By Iceland Review

The European Commissioner for Enlargement Olli Rehn remains negative towards ideas on Iceland adopting the euro without joining the European Union. The comparison to Montenegro’s unilateral adoption of the euro is not valid in his opinion.

EU Central Bank, Frankfurt, Germany. Copyright: Icelandic Photo Agency.

Rehn described the case of Montenegro, which after adopting the euro applied for EU membership, to Morgunbladid as unique because of the war in the former Yugoslavia and the fact that Montenegro used to have the German mark as its currency.

“Don’t draw any positive conclusions from that, not when Iceland is concerned,” Rehn said. “The EU’s stand is very clear. We do not support and would not accept a unilateral adoption of the euro. For a normal developed state in Europe, which might be aiming for EU membership, only the conventional way is possible, which is fulfilling the Maastricht Treaty.”

Icelandic economists agree. “A unilateral adoption of the euro is no magical solution,” reads the headline of an article published in Morgunbladid today, which was sent to the newspaper and signed by 32 economists.

“Icelanders are now struggling with the consequences of a currency crisis and a financial crisis. The currency crisis is in fact still unsolved because its solution has been postponed with the implementation of restrictions on […] trade,” the intro continues.

“A unilateral adoption of a foreign currency is not likely to solve the currency crisis and other, and worse, problems could arise should Iceland choose that path,” the article claims.

Rehn further stated that a unilateral adoption of the euro would complicate Iceland’s potential application process for EU membership. “I trust Iceland won’t do that […]. If Iceland applies for EU membership and marks a clear policy on becoming a member of the Eurozone, financial markets usually look towards that […] and the effects would be noticed a long time before Iceland is granted access to the Eurozone.”

“That has been the development in most euro countries since the late 1990s, for example in the euro country that I am most familiar with, Finland. It provided substantial help in fighting the economic crisis, even though the Eurozone didn’t exist at that time,” Rehn explained.

Click here to read more about ideas on the unilateral adoption of the Euro and here to read about Rehn’s attitude towards Iceland’s potential application for EU membership.

Click here to read about how Iceland’s government feels towards Iceland joining the EU.

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