Kuwait City, May 25: Central banks in the four Gulf states that signed a monetary union pact are studying the impact of the eurozone crisis on their own common currency plans, Kuwait’s foreign minister said on Tuesday.
“This is a highly technical issue and is being handled by the central banks of the member states,” Sheikh Mohammed al-Sabah, whose country is the rotating president of the six-member Gulf Cooperation Council (GCC), told reporters.
Bahrain, Kuwait, Qatar and Saudi Arabia signed the monetary pact while the United Arab Emirates, the second-biggest GCC economy, and Oman pulled out.
Sheikh Mohammed said on Sunday that the four GCC states had paused on monetary union to draw lessons from the debt crisis in Europe and its impact on the euro.
“A pause is not a stop,” Sheikh Mohammed said on Tuesday. “A pause is a reflection … to see what went wrong.”
The minister pointed to “a lot of discussion in Europe about what went wrong” regarding the debt crisis and the euro. “In that sense, we are following that discussion and we are trying to learn from their mistakes.”
The Kuwaiti minister insisted the energy-rich GCC states would go ahead with monetary union and a common currency.
“We are going ahead with the common currency. We just want to make sure that the lessons of the Greek drama does not escape us … When we hit the start button again, we might be faster, more assured and confident.”
At their summit in Kuwait in December, the four GCC members officially launched monetary union and later set up a monetary council, a precursor for a future GCC central bank.
—Agencies