4.4.2012 | 12:27
Iceland should adopt the Canadian dollar
forseti Íslands | |||||
forseti Íslands |
Iceland should adopt the Canadian Dollar»Canada's foreign policy newsweekly«
Recently it was reported that there was increased positive movements brewing in Iceland advocating for the adoption of the stable Canadian dollar to alleviate Icelands long-term currency woes, and historically high levels of inflation. Certainly, the current problems that the eurozone is facing, resulting from the ongoing Greek debt crisis, have been a major contributing factor in shifting Icelands formerly exclusive focus on moving towards adopting the euro towards the apparent stability that the loonie offers. However, regardless of the fact that the prospects of Iceland adopting the Canadian dollar also appeared less likely when Icelandic Economic Affairs Minister Steingrímur J. Sigfússon recently stated that the adoption of the loonie was not on the table, it is the position here that officials in Ottawa reacted too hastily. Instead, the Canadian government, acting through soft-power diplomacy, should be working proactively to encourage such a move on the part of Icelandersespecially if Reykjavik signals its intentions to talk, as Icelands adoption of the Canadian dollar would be in the long-term political, economic and strategic interests of Canada. While a recent article in the Toronto Star titled Iceland and the loonie: Why adopting the Canadian dollar might lack currency also painted such prospects in a negative light, little hard evidence was given in regards to how this would be negative for Canada. Instead, much of discussion focused on the potential negatives for Iceland, such as the obvious fact that Reykjavik would essentially surrender control over monetary policy and interest rates to the Bank of Canada. However, one could respond that the same prospects would be virtually assured if Iceland surrendered its monetary policy to the European Central Bank in Frankfurt which could prove increasingly problematic for Icelanders considering the current debt crisis that the eurozone is facing. Moreover, regardless of the above statements by Mr. Sigfússon downplaying the prospects of Iceland adopting the loonie, politics can change fast, and Iceland might increasingly have to look to alternative options other than the euro.
Most importantly, just the prospect of such a move by Iceland would serve to further reinforce and strengthen the Canadian dollar, thus increasing Canadian purchasing power and prestige internationally.
Many other economic benefits would result as well, as Icelands adoption of the loonie would facilitate further increased commerce and trade between the two countries.
In doing so, this would help increase key opportunities for Canadian exporters via the diversification of Canadian export markets. These ties would have important benefits for important Canadian economic sectors in fisheries, natural resources and raw materials.
Certainly, the increased ties that would come as a result of the Icelandic adoption of the Canadian dollar would only serve to further enrich such already close economic links.
Additional benefits would also accrue, which would involve increased opportunities for valuable mutually beneficial exchanges in education, culture and the arts, as well as the prospect of increased tourism between the two countries.
Indeed, such bonds would be facilitated by the fact that Iceland is one of the most anglophile countries in Europe, as almost the whole population speaks English as their second language.
Aside from the economic benefits, such a move by Iceland would also have important strategic benefits in helping Canada further reassert its position as a dominant and influential power on the world stage. Certainly, the cementing of strong relations between the two countries would be of important benefit to Canadas long-term strategic interests, especially in regards to promoting Canadas sovereignty claims in the Arctic.
Closer relations resulting from such increased political, economic and diplomatic ties would also certainly give Canada a sympathetic ear from Icelanders and a key ally in helping to promote Canadas Arctic interests.
As a fellow Arctic nation, having Iceland on our side would help promote Canadas goals in the Arctic, not only in giving Ottawa added political weight and moral support in disputes with Russia, but also in dealing with infringing boundary claims from the United States and Denmark.
|