4 ms·

The EU and the eurozone aren't the same. If Denmark hasn't adopted the euro, why would Iceland do so? Edited to remove Sweden because it's obliged to eventuall

by strken 2y ago

The EU and the eurozone aren't the same. If Denmark hasn't adopted the euro, why would Iceland do so? Edited to remove Sweden because it's obliged to eventually adopt the euro.

csmpltn 2y ago
Denmark has pegged their currency to the Euro.
- iamacyborg 2y ago
  Switzerland pegged the Frank against the US Dollar, until they didn’t.
- throw5959 2y ago
  Many EU countries have done so and then few years ago many stopped doing it.
IceDane 2y ago
Because the Icelandic krona is basically universally agreed by everyone to be garbage monopoly money that only stays because of the oligarchs that are in power. Also, yeah, the Danish Krona is pegged to the euro at ~7.45 so there is little incentive to switch over.
- woodpanel 2y ago
  interesting to read the Icelandic Version of „oligarchs in power want xyz“. Although it doesn’t make sense, because the influx of cheap money would make joining the EU an obvious boon for that class, wouldn’t it?
- rrr_oh_man 2y ago
  > money that only stays because of the oligarchs that are in power Can you elaborate?
franga2000 2y ago
Being this late to the party and not that powerful of a country, I would be willing to bet the EU would force them into it as a condition to join.
- audunw 2y ago
  Why? It’s in the EUs interest to not create horror stories about what happens when a country joins. It makes a lot more sense to make Iceland decide on the timeline for adopting the Euro themselves, so the transition is more likely to be smooth. And this is exactly what the policy for adopting the Euro has been. A shock therapy Euro adoption is not in the interest of anyone.
littlestymaar 2y ago
In theory EU and the Euro area are the same, because the TFEU says so. But in practice it's more complicated than this as Danes negotiated and opt-out clause during the negotiation of the treaty of Maastricht, and even though such clause isn't open to new entrants, in reality nothing prevents negotiations to eventually lead to such an outcome. The case of Sweden is interesting though, they don't have an opt-out clause so they are obligated to adopt the Euro eventually, but they exploited a loophole by not joining the newest version of European Exchange Rate Mechanism after the 1999, which prevents their entry in the Euro.
mike_hearn 2y ago
Because it's legally required by treaty. Of course, the EU often ignores its own treaties. So that's not a hard guarantee. But the first rule of the EU is that everyone has to pretend it follows its own rules even when it doesn't, so it's not like Icelandic leaders can just announce they'll join the EU but won't adopt the Euro.
- thih9 2y ago
  > Since the convergence criteria requires participation in ERM II for a minimum of two years, and non-eurozone member states are responsible for deciding when to join ERM II, they can delay their compliance with the criteria by not joining ERM II. > Denmark has a treaty opt-out from the obligation to join the eurozone even if it complies with all criteria. https://en.m.wikipedia.org/wiki/Enlargement_of_the_eurozone https://en.m.wikipedia.org/wiki/Enlargement_of_the_eurozone
- cabalamat 2y ago
  EU countries are not required to join the Euro. They are required to say they will at some unspecified future date, but that's another matter.
  - woodpanel 2y ago
    What a ridiculous policy by itself.
  - mike_hearn 2y ago
    This is angels-on-pins level stuff, though. In normal English lax enforcement of a rule doesn't mean you're not required to obey it. It just means you're gambling that you won't be put under sufficient pressure to crack your resolve. All EU countries have to publicly commit to joining the Euro and doing the work to do so. They are therefore required to join it, under any reasonable interpretation of the treaty language. The fact that some countries realized they could just not do what they agreed to and/or hack their economy to avoid the entry criteria, without any consequences, is good evidence that the treaties are indeed meaningless. But lax enforcement isn't the same as no requirement. The EU Commission could change their stance at any time.

by strken 2y ago

The EU and the eurozone aren't the same. If Denmark hasn't adopted the euro, why would Iceland do so? Edited to remove Sweden because it's obliged to eventually adopt the euro.

csmpltn 2y ago

Denmark has pegged their currency to the Euro.

iamacyborg 2y ago
Switzerland pegged the Frank against the US Dollar, until they didn’t.
throw5959 2y ago
Many EU countries have done so and then few years ago many stopped doing it.

IceDane 2y ago

Because the Icelandic krona is basically universally agreed by everyone to be garbage monopoly money that only stays because of the oligarchs that are in power. Also, yeah, the Danish Krona is pegged to the euro at ~7.45 so there is little incentive to switch over.

woodpanel 2y ago
interesting to read the Icelandic Version of „oligarchs in power want xyz“. Although it doesn’t make sense, because the influx of cheap money would make joining the EU an obvious boon for that class, wouldn’t it?
rrr_oh_man 2y ago
> money that only stays because of the oligarchs that are in power Can you elaborate?

franga2000 2y ago

Being this late to the party and not that powerful of a country, I would be willing to bet the EU would force them into it as a condition to join.

audunw 2y ago
Why? It’s in the EUs interest to not create horror stories about what happens when a country joins. It makes a lot more sense to make Iceland decide on the timeline for adopting the Euro themselves, so the transition is more likely to be smooth. And this is exactly what the policy for adopting the Euro has been. A shock therapy Euro adoption is not in the interest of anyone.

littlestymaar 2y ago

In theory EU and the Euro area are the same, because the TFEU says so. But in practice it's more complicated than this as Danes negotiated and opt-out clause during the negotiation of the treaty of Maastricht, and even though such clause isn't open to new entrants, in reality nothing prevents negotiations to eventually lead to such an outcome. The case of Sweden is interesting though, they don't have an opt-out clause so they are obligated to adopt the Euro eventually, but they exploited a loophole by not joining the newest version of European Exchange Rate Mechanism after the 1999, which prevents their entry in the Euro.

mike_hearn 2y ago

Because it's legally required by treaty. Of course, the EU often ignores its own treaties. So that's not a hard guarantee. But the first rule of the EU is that everyone has to pretend it follows its own rules even when it doesn't, so it's not like Icelandic leaders can just announce they'll join the EU but won't adopt the Euro.

thih9 2y ago
> Since the convergence criteria requires participation in ERM II for a minimum of two years, and non-eurozone member states are responsible for deciding when to join ERM II, they can delay their compliance with the criteria by not joining ERM II. > Denmark has a treaty opt-out from the obligation to join the eurozone even if it complies with all criteria. https://en.m.wikipedia.org/wiki/Enlargement_of_the_eurozone https://en.m.wikipedia.org/wiki/Enlargement_of_the_eurozone
cabalamat 2y ago
EU countries are not required to join the Euro. They are required to say they will at some unspecified future date, but that's another matter.
- woodpanel 2y ago
  What a ridiculous policy by itself.
- mike_hearn 2y ago
  This is angels-on-pins level stuff, though. In normal English lax enforcement of a rule doesn't mean you're not required to obey it. It just means you're gambling that you won't be put under sufficient pressure to crack your resolve. All EU countries have to publicly commit to joining the Euro and doing the work to do so. They are therefore required to join it, under any reasonable interpretation of the treaty language. The fact that some countries realized they could just not do what they agreed to and/or hack their economy to avoid the entry criteria, without any consequences, is good evidence that the treaties are indeed meaningless. But lax enforcement isn't the same as no requirement. The EU Commission could change their stance at any time.