PORT TOWNSEND, Wash. (MarketWatch) -- Will Iceland get loonie? asked one major Canadian business publication last week. Is that troubled, isolated nation about to shun the European Union and the euro and adopt the Canadian dollar as its currency?

Iceland's fear of the euro collapsing has caused one of Iceland's political parties to openly suggest the idea of going Canadian and dropping the idea of EU membership and currency. (And besides, the just-released see-through Canadian plastic bank notes are waycool.)

Ever since Canadian Business magazine broke the story of Iceland possibly adopting the loonie, the Canadian media has been having a field day with the story. It probably won't happen, but a stable economy (the kind Iceland wants again) needs a stable currency. Like Canada's.

The Bank of Canada, for its part, says it will be glad to sell Iceland all the Canadian notes and coins it wants. And that's all it'll say; it doesn't comment on other countries' monetary policies.

Iceland's krona has taken a battering since the collapse of the country's three major banks in 2007. The country is still struggling to recover from that speculative disaster, and the krona is still being called a glorified poker chip. Iceland's economy may be off life support, but it's still in serious condition.

The krona is roughly 40% from its 2007 peak. Capital controls put in place after the crisis restrict the flow of money into and out of Iceland and keep the currency stable. But if the controls are removed too soon, the krona could crash again, while keeping them for too long discourages foreign investment. Not a good situation.

Joining the EU, which Iceland saw as a way to attain a stable currency, doesn't look like much of a lifeboat these days. Fellow northerner Canada looks like a viable Plan B to some in Iceland these days.

Aside from worries about EU stability, many Icelanders are concerned about the loss of autonomy that comes with joining, particularly if it means less control over their prized fishing industry.