The crisis in the eurozone has prompted Gulf countries to “wait and think” about the planned establishment of a monetary union, said a senior Gulf official.
Kuwaiti Foreign Minister Sheikh Mohamad al-Sabah stated that it would be irresponsible for the Gulf Cooperation Council (GCC) to proceed with the implementation of this plan before thoroughly considering all the implications of the problems affecting Europe. "The eurozone crisis is a new circumstance," he said at the conclusion of the GCC foreign ministers’ meeting in the Saudi city of Jeddah. "Many lessons arise from it that should make us pause," he added. The ministers agreed at the meeting to halt the initiative to establish a regional currency that was launched last year by four GCC members – Saudi Arabia, Kuwait, Bahrain, and Qatar.
Oman and the United Arab Emirates did not join this initiative due to political disagreements, including the UAE’s dissatisfaction with the plan for the future central bank of the monetary union to be based in Riyadh. "A pause does not mean a delay," Sabah emphasized, adding that the goal is solely to "think carefully." In addition to monetary policies, the GCC must also consider issues related to the fiscal situations of member countries, he said. "We need to think about fiscal policy. A monetary union requires the alignment of our budgetary policies." (H)
