Euro use as single currency calls for reconsidering monetary policies
Regional-European Union, Economics, 3/20/2002

Egyptian Secretary general of the Arab Economic Unity Council, Ahmed Goweili, has called for re-formulating the strategies of the Arab banks so as to be ready to deal with the unified European market in light of the use of the euro as a single currency of the European Union (EU) countries.

Addressing the opening session of a symposium held under the title "The Euro and the European Monetary Policy", Goweili anticipated that the euro would have a positive effect on the Arab monetary markets.

"For example, it could achieve stability for some Arab currencies once they are linked to it, by means of providing due protection to the foreign investments of these countries together with achieving balance among the currencies dominating the world's monetary markets."

Goweili added that the euro would also open the door for the Mediterranean Basin countries to make the best use of the opportunities that would be available in the EU markets as about 30 per cent of the EU trade with the Basin countries was expected to turn to the euro.

He also stressed the fact that the EU was the first trade partner of the Arab states followed by Japan and the US.

"Exports to EU countries during the 1990s formed about 25-28 per cent of the total Arab exports, while they export about 16-18 per cent to Japan and 9 to 10.5 per cent to the US," he said. By the same token the EU had provided about 40 per cent of Arab imports.

"Trading with the EU through a single currency is likely to make it easier than dealing with each member country according to its local currency," Goweili said.

Addressing the symposium, EU ambassador to Cairo, Ian Boag, said the use of the euro as a single currency of the 12 EU member countries had proved successful in its first stages, adding that it was really important to be familiar with the changes and indications that had followed the use of the euro and to know the views of the neighbour countries of the EU in the Mediterranean basin on the use of that single currency in Europe.

Dean of the Faculty of Economics and Political Sciences at the Cairo University, Dr Kamal el-Menoufi, also addressed the symposium saying that arrangements were being made to establish a department for European studies at the University.

He stressed the importance of acquainting universities with the importance of the European role and its relations with Egypt and the Arab world in general.

He described the issuance of the euro as a great step that reflected unprecedented success for the EU.

He also underlined the significance of studying the positive and the negative aspects of using the euro and its ability to bring stability to the region after Europe had become one market.

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