Unilateral adoption of euro possible option for Iceland, says economist

Unilateral "euroisation" of Iceland's economy is possible without a loss of independence, but the country must choose between the krona and the euro soon, a prominent economist told the Icelandic Chamber of Commerce yesterday (13 February).

"Because of the exceptionally high degree of exchange rate pass-through into domestic prices and equally exceptional financial openness of Iceland, unilateral euroisation would not be sacrificing much effective monetary policy independence," Richard ...