The Middle East's Euro

The future of a planned currency union in the Persian Gulf did not look much clearer on Monday, despite the signing of a pact between Saudi Arabia, Qatar, Kuwait and Bahrain the day before.

Although the agreement seemed to definitively exclude the United Arab Emirates which pulled out of the proposed union in protest against the encroaching dominance of Saudi Arabia, it's unlikely that the Middle Eastern alliance would ever truly bar such a potentially significant economic partner. Still, the four-country union is unlikely to bend to the UAE's wishes, which would rather have the planned central bank located in Abu Dhabi, instead of the Saudi capital of Riyadh.

"The door isn't closed for the UAE," said Philippe Dauba-Pantanacce, an economist at Standard Chartered. "Then again, I'm almost certain that Saudi Arabia will not go back on its stance that the central bank should be located in Riyadh."