The New York Times today examines why Iceland has weathered the financial crisis better than most other European countries. The article mentions many of Iceland’s strict currency controls, which it was able to impose because it’s not a member of the European Union, as well as its willingness to let its banks fail. However, the article also mentions one possible step that the Icelandic government might take to further strengthen its economy: adopting the Canadian dollar.
The concept of Canadian economic expansionism may seem a little bit quirky—after all, Canada is not exactly known as a behemoth of soft power. But it would bring certain concrete advantages to Iceland. It would bring needed foreign investment back into the country while avoiding the pitfalls of attaching the country to the Euro and the European Central Bank. After all, Saskatchewan is a much safer investment than Spain at present. The Canadian press was excited by this possibility, noting that if Iceland adopted the Canadian dollar that Greenland could follow too, eventually leading to a single Arctic currency.
Iceland is still far more closely linked with Europe than Canada. But considering both the possible financial advantages as well as Iceland’s traditional flinty independence (it did engage in a quasi-war with the United Kingdom in the 1970s), it might still adopt the Loonie. Plus, for all its faults, Canadian economic imperialism can’t be any worse than Canadian cultural imperialism.