Euro Crisis to Prolong Iceland Krona Controls, Morgunbladid Says

Uncertainty about the future of the European single currency will delay Iceland’s plans to remove capital controls before the end of 2015, Morgunbladid reported, citing Economy Minister Steingrimur J. Sigfusson.

“The capital controls reduce the chances of a run on our currency and a capital flight” out of Iceland, the Reykjavik-based newspaper cited Sigfusson as saying. “It’s clear that we have to evaluate the capital controls removal plan in light of the situation in Europe,” he said, according to Morgunbladid.

Iceland imposed capital controls in 2008 following the collapse of its three largest lenders in October of that year. The controls are stopping as much as $8 billion in kronur assets from leaving the economy, according to an estimate by Arion Bank hf.

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