The Big Mac has fallen victim to the collapse of Iceland's national currency, the krona, leaving pundits to speculate on the implications of the exit of a world-famous brand from an economically battered country.
What happened? Simply put, cost is the culprit of McDonald's Icelandic woes. The krona lost over half its value in the past two years. As a result, the franchise operator of Iceland's three local McDonald's could no longer afford to follow strict rules requiring that all ingredients be imported from Germany. Though the causes are simple, the situation has prompted economic analysts to revive debates over globalization and currency exchange. What are they saying?
- Weaker Currency Increases Poverty The Wall Street Journal Europe uses McDonald's flight from Iceland as a counterpoint to Euro-zone countries that argue their membership in the currency bloc has worsened their economic woes. "Debasing one's currency makes a country poorer, not richer. Just ask residents of Reykjavik, who now must travel 900 miles to get their Big Mac -- to Dublin."
- No, a Weaker Krona Is Essential Ambrose Evans-Pritchard takes issue with The Wall Street Journal's view of Iceland's latest currency troubles. "The weak krona is doing what it should do. Iceland's exporters are recovering. Import substitution is going gangbusters," he says. If you care to discuss further with him, though, tread carefully. "If I hear one more person claim the crash in the Icelandic krona has been a disaster, I think I will punch him."
- Now Iceland Is Free to Go to War MoneyWeek's David Stevenson jokes that Iceland's loss frees it to disprove Thomas Friedman's thesis that "no two countries that both had McDonald's have fought a war against each other since each got its McDonald's." The British journalist has an idea of which country Iceland would strike in the unlikely scenario: "[Iceland] could perhaps be forgiven for feeling a bit annoyed with us -- we did freeze their assets using anti-terror laws, after all."