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Will the Euro replace the króna? A common currency is popular with the general public, who no longer have to exchange currency when travelling between member countries. Businesses too would make some saving. Giving up a national currency entails, however, various disadvantages, although these are less frequently mentioned. In an independent state, setting the exchange rate of the national currency, along with levels of taxation and interest rates, is one of the principal tools to control the ill-effects of economic fluctuations, which have a constant tendency to drive national economies off course, either by hazardous overheating, or by serious recession and unemployment. Nations whose economies are similar can join forces to use a common currency with excellent results. The Icelandic economy, however, differs fundamentally from the economies of EU member states. The economy experiences violent fluctuations, which bear no relation to the economic swings experienced in the EU; this is because here in Iceland such fluctuations are generally attributable to variations in the export value of seafood products. This does not apply to the EU. It would be highly unfavourable for Iceland if the currency used here were subject to exchange-rate trends that did not reflect Icelandic conditions, but conditions in nations where entirely different economic factors prevail. The same applies to the application of taxation and interest rates, which are now being centrally controlled within the EU.
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