> Presumably, in absence of major conflicts between Iceland and its trading partners, as a result of economic imbalances. Those won't go away if Iceland were to join the eurozone, either as a EU member or via the Kosovo/Montenegro route.

Part of it would. There is a cost to maintaining your own currency that can drag down the economy.

Counterfeiting is an obvious one, getting software and markets to support is another one, but what parent above you is likely arguing against currency speculators/manipulators.

You need to defend it to keep it relatively stable so it stays as a store of value or your companies will just use dollars or euro anyway. If your currency is so small a firm in New York can force your currency to change by 50% in a night, regardless of the fundamentals of the businesses who use the króna, you have a problem. Using the Euro also means businesses do not have to pay conversion costs or deal with additional accounting issues for tracking the fluctuations in the currency.