Single GCC currency is still years away

Al-Suweidi: Deadline of 2015 is more realistic

• Increase image
• View all images

With monetary and fiscal convergence criteria yet to be agreed, delays are inevitable The birth of the GCC's single currency is enduring almost as long a gestation as that of its European cousin the euro.

It was 20 years after the European Monetary System was created in 1979 that the euro was finally introduced.

The GCC single currency was agreed in principle in 2001, with 2010 set as the target for monetary union to take effect. But it looks like many more years will pass before it appears in people's wallets.

With monetary and fiscal convergence criteria yet to be agreed, delays are inevitable. In November 2007, UAE central bank gover-nor Nasser al-Suweidi said 2015 would be more realistic.
Next month, GCC leaders will meet in Muscat to discuss the council's key projects, and monetary union will be high on the list, presenting a chance to resolve some of the main sticking points.

The global financial crisis could galvanise them into action – it is a brutal reminder of the need for the single currency plan to be credible and workable.

The world's currency markets have to believe the project is based on solid found-ations and the GCC states will be able to effectively manage monetary policy and maintain stability in the event of another global crisis.

But the Muscat summit will still struggle to agree where to locate the GCC central bank. That at least is a sign that governments still believe the prestige of the project is worth fighting for.