Events around the world are changing on a daily basis especially in the world of economics. Iceland is facing some real changes and hard decisions with their economy in shambles. Iceland became independent of Denmark in 1944 and has always prized its sovereignty, thus it has resisted joining the European Union opting to join the European Economic Area (EEA) which gives it access to the EU’s single market. Iceland also fears foreign control of its fishing industry and having to give up whaling because the EU does not allow it.
But now Iceland is reconsidering their stance on EU membership because the Icelandic krona is barely traded anymore and has become de-valued and its economy has collapsed due to too much debt. Wonder who else has been playing that debt game? Because the krona is almost worthless Iceland’s banks cannot borrow abroad. And a large majority of Icelanders support a move to a new currency, favoring the Euro.
Next week the ruling Independence Party is meeting to discuss the future. The Independence Party follows its name by being hostile to EU membership. Geir Haarde, the Prime Minister of Iceland, is not crazy about a move to the Euro, but he also knows that the krona is done. The EU is requiring that Iceland join the EU first before they can adopt the Euro. This might get Iceland to look at the dollar, but our dollar is losing value daily as the printing presses keep going. There is a group that is part of the coalition called the Social Democrats that wants to join the EU – imagine that, Democrats wanting to become more globalized and give up sovereignty – and have threatened to quit the coalition if an EU membership application is not lodged by March. Iceland could become an EU member by 2011, but membership of the single currency would take a bit longer. The act of working towards euro convergence would reassure the markets though which is desperately needed.
This is just another step closer to that one world government. The European Union now encompasses nearly all European countries, twenty-seven to be exact. It started with only six member states so it has grown quickly.