This is really annoying!
Just yesterday I was planning to blog that I thought Iceland should peg their currency to the euro, but I was tired and decided to postpone it till today, and now those bastards have gone ahead and have stolen my idea, and I can’t even prove I thought of it first! ;-(
Anyway, I’m not sure just pegging the króna to the euro is very safe, not given the reportedly diminutive size of the Seðlabanki’s euro reserves.
If at all possible, I’d suggest introducing a proper currency board. I’m not entirely sure whether that can be done while keeping the currency, or whether it’d be better to issue a new currency, the Evrópukróna, at par with the euro.
As far as I can tell, a currency board would give Iceland many of the benefits without all the potential problems that a unilateral introduction of the euro would have.