Members of the Icelandic Parliament have submitted a motion to review Iceland’s monetary system and look at alternative monetary systems.

Last week, a resolution calling for the establishment of a special commission to “carry out a review of the arrangements of money creation in Iceland and to make recommendations for improvements” was submitted by 11 Members of the Althingi, the Parliament of Iceland.

The resolution comes six months after the release of a report commissioned by the Prime Minister of Iceland entitled Monetary Reform – A better monetary system for Iceland that outlined the need for a fundamental reform of Iceland’s monetary system.

This report emphasises the limits of the current monetary system and sets out the merits of a Sovereign Money system, as advocated by Positive Money.

It is no surprise that the author of the report, the progressive MP Frosti Sigurjónsson, is also the politician initiating this call for a Money Commission. This will enable the Althingi to reflect further on the current money system and takes Iceland a step closer to reform.

The proposed money commission will be composed of 6 MPs from different political parties. It will deliver its findings to Parliament within 10 months of being founded.

There is however still a long way to go before the Money Commission is set up.

According to the procedure (pdf) of Iceland’s parliament, here are the next steps the resolution has to go throughout:

Agenda setting: The Speaker of Althingi puts the resolution in the agenda First reading: the resolution is debated in plenary Discussion in Committee: the resolution would probably be passed to the Committee of Economics and Trade, headed by Frosti Sigurjónsson Review: the committee calls for reviews of the resolution Opinion of the Committee: the committee delivers its opinion to Althingi and proposed amendments. Second Reading: the resolution is debated again at a second plenary reading Voting: the resolution needs to be voted by a majority of MPs, with 50% participation quorum. There are 63 MPs in the Icelandic Parliament, so 32 supporting MPs are required, assuming full participation.

The resolution has been co-submitted by 11 MPs from five different political parties, which gives it a good chance of success. However the resolution must be voted on before the end of the current congress term – by next spring. If it fails, it would have to be submitted again.

The Icelandic movement for monetary reform Betra Peningakerfi welcome this new parliamentary initiative. “The resolution shows significant and growing interest in monetary reform in Iceland. A thorough comparison of a Sovereign Money system and the current monetary system is an important next step towards monetary reform.” said Sigurvin B. Sigurjónsson from Betra Peningakerfi.

Read the resolution here