Sunday, June 24, 2012

Nordic Crown - new currency for S, N, DK, Iceland, Finland - others?

There was an article recently that proposed Finland to be the first Euro country to get "enough" and exit the currency. It was called Finexit.

I fail to see this happening as such, but if connected to a larger Northern European change of currencies, it might actually make a lot of sense.

Currently, Sweden, Norway, Denmark and Iceland each have their crowns. None of these countries are in the Euro. They could fairly easily form a real economic union, learning from the mistakes of the Euro and not repeating them.

If *that* were to happen, it would be an easy choice for Finland to join in.

But it might not stop there.

Poland has been knocking on the Euro door, but not so much recently. We have joint history with wars, joint kings, all that stuff. And Poland is one of the nicely performing non-Euro economies, anyways. Call it the Baltic Union if you will.

Then there are Latvia, Lithuania, Estonia (another Nordic Euro country). Frankly, I don't expect Estonia to jump off Euro but the others might jump in the Crown.

Together with Poland, the Nordic area would have a population base roughly the same as the UK. This should be enough to have a stable, global currency.

Hopefully, the Finnish Bank (or someone) is working on this.

Disclaimer: As you can guess, I know pretty little of the banking world. Then again, so it seems the people working within the system do, as well. ;)

The Nordic Crown could take on the NOK abbreviation, or a more hip NK2.

What I feel would be great with such a monetary union is that it employs countries within and outside of the EU, as well as within and outside of the NATO.


The population estimates were rather correct. All the suggested countries (incl. Poland) would bring 63.6 million people into the Nordic Crown area. That is slightly more than either UK (62.8 M) or France (63.5 M).

Historic exchange rates (last 2 years) of the involved currencies.

Comparison to Swiss franque tells something of the stability of the current NOK:

Addendum II

Inflation rates (May 2012):

Norway: 0.50 %
Sweden: 1.0 %
Finland: 3.1 %
Poland: 3.6 %
Denmark: 2.1 %
Iceland: 5.40 %

For comparison:

UK: 2.8 %
Euro-zone: 2.4 %
Switzerland: -1.0 %

Interest rates:

Norway: 1.50 %
Sweden: 1.50 %
Finland: 1.00 %
Poland: 4.75 %
Denmark: 0.45 %
Iceland: 5.75 %

For comparison:

UK: 0.50 %
Euro-zone: 1.0 %
Switzerland: 0.0 %