Canada and Iceland: A loonie idea NATURALLY enough, Canadians are thrilled whenever foreigners single out their country for positive attention - especially when the praise raises it above the behemoth to the south. The idea that Iceland might want to ditch its battered krona in favour of the Canadian dollar, not the American version, scores high in this regard. It strokes the Canadian ego and bolsters the Conservative government's line that the economy is one of the world's strongest. But is it a serious proposition? The Canadian media treated it thus when Canada's ambassador to Iceland, Alan Bones, told Iceland's national broadcaster on March 2nd that his government would be open to discussing the idea. Otherwise serious commentators pointed out that Iceland and Canada were both resource economies and shared an interest in Arctic matters. Economists said there were few technical problems in Iceland abandoning the krona and adopting the loonie, as the Canadian currency is known. Then cracks began to appear - not uncommon in Iceland, a volcanic country that sits astride the mid-Atlantic Ridge. A speech by Mr Bones, in which he was expected to expand on the idea of allowing Iceland to adopt the loonie, was suddenly cancelled on Ottawa's orders. More important, Sigmundur Gunnlaugsson, the leader of the opposition Progressive Party, which seemed to be pushing the idea, suggested that it was just a ploy to force Iceland's government, which is seeking to join the European Union and possibly adopt the euro, to have a serious debate about alternatives. "It's not like we are fighting for the adoption of the Canadian dollar," he said. Polls show that seven out of ten Icelanders are happy to ditch the krona in favour of a more stable currency, but those pulling for the loonie and the euro are evenly matched. So the Icelandic government is in a bind. Perhaps the half of the country that sits on the North American tectonic plate pulling westward should get the loonie, while the other half on the Eurasian plate pulling east makes do with the euro.