GCC to consult Europe on monetary union

RIYADH, 9 October — Gulf Arab states, seeking to set up a monetary union and issue a single currency, decided yesterday to ask the European Central Bank to study requirements for their planned union, the governor of Oman’s central bank said.

"We have decided to ask the European Central Bank to study the requirements and procedures needed for the monetary union," Hamoud Al-Zadjali told reporters at the end of a meeting here of GCC central bank governors. The governors agreed on a timetable to set up a monetary union by 2005 and issue a single currency before 2010, as was decided last December by GCC leaders.

Zadjali said the study, expected to be completed within six months, would aim at showing ways to unify GCC monetary policies and identify obstacles which faced Europe on its way to monetary union.

The GCC states are working on unifying these policies, but more measures and procedures may be needed on the basis of the study, the Omani official said.

Zadjali opened the meeting by urging the GCC states to do more to coordinate and bring closer their monetary policies, laws and regulations if they are to achieve a monetary union by 2005.

Meanwhile, a Gulf customs official said GCC states are prepared for the launch in January 2003 of their customs union, the first in a series of measures leading to full economic integration. "All the Gulf states have completed their preparations for the customs union," Mahmud al-Kuwaimi, director of Oman’s Customs Department, told reporters after a meeting here of the directors of Gulf customs.

"There are no obstacles that may hinder or delay the implementation of the customs union. Everything is set for the launch," Kuwaimi added.

The GCC customs officials also approved a computer link-up between their departments and all sea, land and air terminals in the member states. The link-up is expected to be implemented within six months. GCC finance ministers in June cleared the biggest stumbling block to their customs union by agreeing to distribute customs revenues on the basis of the final destination of imports. The agreement would be implemented for a period of three years before being reevaluated.