Is Europe crises impacting UAE?
Mar 1st 2012, 3:15 pm
#1
Just Joined
Thread Starter
Joined: Apr 2008
Posts: 26
Is Europe crisis impacting UAE?
Looks like Europe is going from bad to worse, I see a gradual improvement in US economy. From What I have gathered from friends in middle east is that UAE economy is showing some signs of stabilization.
Do you guys think, that Europe crisis will bring down UAE economy again?
Do you guys think, that Europe crisis will bring down UAE economy again?
Last edited by neil_95051; Mar 1st 2012 at 3:23 pm.
Mar 2nd 2012, 10:23 am
#2
Knee deep and rising
Joined: Sep 2011
Posts: 3,007
Re: Is Europe crisis impacting UAE?
Looks like Europe is going from bad to worse, I see a gradual improvement in US economy. From What I have gathered from friends in middle east is that UAE economy is showing some signs of stabilization.
Do you guys think, that Europe crisis will bring down UAE economy again?
Do you guys think, that Europe crisis will bring down UAE economy again?
Mar 3rd 2012, 7:08 am
#3
Lost in BE Cyberspace
Joined: Jul 2007
Posts: 13,553
Re: Is Europe crises impacting UAE?
If I can just bore you with some technical stuff for a moment...........
One of the most direct consequences of the Euro crisis has been the way European banks who were previously active here (notably one or two Frenchies) have packed up and gone home - not literally, but they are diverting their resources to propping up their balance sheets at home where exposure to, for example, Greek debt is considerable.
The effect of this on the UAE is that there are fewer lenders around, so access to capital is rather harder to obtain, particularly for the SME-sized firms. Firms, including local banks, who have got cash are being much more careful who they lend it to.
However a bigger factor is Iran - it is becoming virtually impossible to do any kind of transaction here with any firm or individual who may have a link, however tenuous, to Iran. This is bizarre on one level - two of Iran's biggest banks (Melli and Saderat) operate openly in the UAE with several branches, and with full Central Bank licensing to support them. The US have now taken steps to exclude Iranian or Iranian-linked institutions from the SWIFT interbank payment system. The CEO of a major UAE bank told me this week that they are advising their cheque account customers not to write a cheque to anyone who they suspect might pay it into an Iranian bank's UAE branch.
One of the most direct consequences of the Euro crisis has been the way European banks who were previously active here (notably one or two Frenchies) have packed up and gone home - not literally, but they are diverting their resources to propping up their balance sheets at home where exposure to, for example, Greek debt is considerable.
The effect of this on the UAE is that there are fewer lenders around, so access to capital is rather harder to obtain, particularly for the SME-sized firms. Firms, including local banks, who have got cash are being much more careful who they lend it to.
However a bigger factor is Iran - it is becoming virtually impossible to do any kind of transaction here with any firm or individual who may have a link, however tenuous, to Iran. This is bizarre on one level - two of Iran's biggest banks (Melli and Saderat) operate openly in the UAE with several branches, and with full Central Bank licensing to support them. The US have now taken steps to exclude Iranian or Iranian-linked institutions from the SWIFT interbank payment system. The CEO of a major UAE bank told me this week that they are advising their cheque account customers not to write a cheque to anyone who they suspect might pay it into an Iranian bank's UAE branch.
Last edited by The Dean; Mar 3rd 2012 at 7:12 am. Reason: .
