Gulf states fail to agree on new timetable for common currency

The global financial crisis appears to have claimed a new casualty: the Persian Gulf dream of creating a common Arab market in the next few years with its own currency modeled after the European Union.

Gulf central bankers met today in Muscat, Oman to discuss plans to create a unified currency, a vision whose near-term prospects are in doubt as the oil-rich states draw up their own plans to deal with the impact of crude prices that have tumbled almost 70% from their highs. The six-nation Gulf Cooperation Council last month dropped its 1 January 2010 deadline for a common currency.

“All attention is now focused on the global financial crisis,” said Eckart Woertz, an analyst with the Dubai-based Gulf Research Center. “It’s important to develop a greater degree of unity to go down the path of monetary union. Now it’s every man for himself.”