JEDDAH, Saudi Arabia (AFP) – The eurozone crisis has convinced Gulf states to “pause” for reflection in their push toward a monetary union, a top Gulf official said on Sunday.
Kuwaiti Foreign Minister Sheikh Mohammad al-Sabah said it would be “irresponsible” for the Gulf Cooperation Council to push ahead without studying the implications of the problems in Europe.
“The new development is the crisis in the eurozone,” he said at the end of a meeting of GCC foreign ministers in Saudi Arabia’s Red Sea city of Jeddah.
“There are a lot of lessons, (so) that we should pause,” he said.
The decision to ease the push toward a regional single currency was taken at the Jeddah meeting on Sunday.
Four GCC members — Saudi Arabia, Kuwait, Bahrain, and Qatar — agreed last year to begin a move toward monetary union.
Two others — Oman and the United Arab Emirates — have not endorsed the union yet due to policy differences, including the UAE’s unhappiness that the eventual Gulf central bank is to be based in Riyadh.
Sabah insisted a “pause does not mean delay”, saying it was mainly “for reflection.”
But he said the GCC needed to study issues relating to their respective fiscal situations on top of monetary policies.
“We have to think about fiscal policy,” he said.
“That requires harmonisation of our budgetary policy.”
“We want to do it at the right time and the right format,” he said of the planned monetary union.
“There are numerous lessons” to be learned from Europe, he said.