Iceland divided over joining eurozone

REYKJAVIK, Iceland, Jan. 28 (UPI) -- Icelandic citizens say they are deeply divided on the question of joining the eurozone with the euro floundering due to ongoing debt issues.

Ironically, many in Iceland, a country of 318,000 people, say the reason to join the eurozone and adopt the euro is because the euro is more stable.

On the other hand, "I don't want the euro, hell no," said a vendor in a central square in the capital city of Reykjavik.

"The countries that have the euro, it's going pretty badly," she said, The Washington Post reported Saturday.

"It's a very hard topic; it's very divisive. It's about national identity, and that's why the debate is so heated. It's a question of where we belong," said Baldur Thorhallsson, a political science professor at the University of Iceland.

Prime Minister Johanna Sigurdardottir favors joining the eurozone, while former Prime Minister Geir Haarde opposes the move. A formal application was begun in 2009, but the ongoing debt issues in Europe have forced many to rethink their positions.

Some say Iceland needs to retain its independence. In the event of an economic downturn, a devaluation of the krona can help the country's export businesses, which can put the local economy back on its feet.

Others worry joining the eurozone would mean Iceland would have to give up some control over its critical fishing industry.

Still others simply believe now is a lousy time to join the eurozone. On the other hand, many who want to join say the sooner the better.

"I am absolutely convinced that they will do whatever it takes to save the euro," said Ossur Skarphedinsson, Iceland's foreign minister, who believes joining the currency region will attract foreign investment.

"I am looking further ahead. In the end, (by not joining) Iceland would lose its competitiveness compared to Europe. We would slowly start to lose the best of every generation. That is my worry," he said.