Debate on EU membership fuels controversy over Iceland's currency the krona, or crown

The debate over joining the EU and eventually adopting the euro has torn the tiny island in the North Atlantic apart. Proponents of EU membership say it's the first step to adopting Europe's common currency and the only way out of the crisis. Opponents are disappointed and hesitant because they feel the EU did relatively little to come to their aid when the crisis began. The fact remains that no foreign bank is trading the Icelandic krona. Only business travellers to Europe are being allowed to exchange small amounts. The Central Bank in Reykjavik has set a fixed rate of exchange at 1:150. On the black market, however, one euro will bring you 400 krona. The high exchange rate is being felt strongly in trade - the island imports many of its goods - including food. Prices have soared. Shopping centers have become deathly quiet. Only tourists are in abundance these days - flocking to Iceland in the belief they can get the best deals money can buy. Unemployment has risen dramatically. Many Icelanders are debating whether or not they can save the krona and stabilise their economy on their own steam - or if EU membership is the only way out. On April 26th they will vote to determine their fate. Hagen Tober has the background story...

DW-World | April 14, 2009

Tags:. .krona. .reykjavik. .icelanders. .icelandic. .proponents