2015-09-24 13:56:34, 回應(0), 人氣(1107)Greek Debt Crisis: EU Should Learn from UAE
June 29th, 2015 by Kara in Case Studies
By: Dr. Kara Tan Bhala
Dubai’s total debt to GDP is about 132 percent of GDP. Greek debt as a percentage of its GDP is 177 percent. Both countries are over leveraged. Neither has the means to service its debt, without help. Yet, the markets are not overly concerned about Dubai’s debt, but are in utter turmoil over Greek debt. The reason? Dubai, as a member of the United Arab Emirates (UAE), was given debt relief by Abu Dhabi, another member of the federation. Greece as a member of the EU was not given debt relief by any members of its federation. The inference? The EU should be more creative, think outside the standard emaciated IMF model, and consider a solution based on Islamic finance principles that takes the form of generous debt relief.
The EU and UAE are both federations
Like the EU, the UAE is a federation of separate states that are economically integrated with a common market and single currency. Unlike the EU, the UAE is far more politically integrated with a common foreign and defense policy. The country is made up of seven emirates, each governed by an emir. The seven emirs make up the Federal Supreme Council, which is the federal government of the UAE. All responsibilities not granted to the national government are reserved to the emirates. The president of the UAE is the Emir of Abu Dhabi and the prime minister is the emir of Dubai.
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