Gulf Cooperation Council (gcc)

- GCC gives us a good opportunity to look at this comparison from the point of view of an organization, which unifies rather specific group of countries.

- They are well integrated in the world economy, being oil-producing countries, and on the other, they are a part of Arab and Muslim world with their specific features and interests.

- These countries are very conservative, trying to preserve their political system based on the authority of ruling families, which have come to power in earlier history. They have their own values, cultural traditions and regional interests.

- Historically, the relationship between GCC and EU goes back to 1983.

- Due to the difference in education and skill level between the two entities, GCC have lagged behind the EU in numerous aspects.

- The recent turmoil that struck the world in 2008 followed by the European debt crisis in 2010 have put the EU rules and regulations into a tough test to see how useful they can become when faced with a major crisis.

- Unfortunately, given the ongoing hustle between the EU leaders over Greece situation is a solid prove that those guidelines have failed to contaminate such catastrophe and have made people raise questions about the future of the EU.

- We highlighted 5 main disadvantages about the GCC, specially how oil is the main driver of the GCC economy and challenges they face once the natural resource vanish.

- Later, we also discuss the 5 main setbacks of EU, with Labour market issues being the one in spotlight.

Two regional organizations with different cultures and politics, but share one common aspect, which is to strengthen their economy in the long run. Relations between the European Union (EU) and the Gulf Cooperation Council (GCC) is an example of a new trend in the process of global integration, which intensification is connected with growing interdependence of oil-exporters and oil- importers in different parts of the world.

After the first official delegation from the European community visited Saudi Arabia in 1983, economic indicators started to improve since then. In 2002, the GCC imports were around 36 billion euro from the EU and the EU imports from the GCC amounted to around 18 billion euro .

In the last 3 years, these figures have increased dramatically. According to the European commission website, EU imports to GCC reached 147.7 billion euro and GCC imports to EU reached 260.04 billion euros .

Regardless of the advantages and disadvantages of having established these political, economic and social relationships, every union is focused solely on how to be the biggest gainer. Despite the GCC being established in 1981, the GCC is far away behind the European Union which was formally established when the Maastricht Treaty came into force on 1 November 1993, and in 1995 Austria, Finland and Sweden joined the newly established EU .

However, with the recent financial crisis that struck the whole world, we started to feel the impact of the European Union and GCC rules and regulations and how they served the case of avoiding economic deterioration.

As mentioned in the beginning, the GCC enjoys some advantages and disadvantages over the European union. Below, we will try to highlight some of the disadvantages of the GCC and EU:

GCC Disadvantages:

1. Oil- Main GCC Economy Driver - Lack Diversification

* The GCC area has some of the fastest growing economies in the world, mostly due to a boom in oil and natural gas revenues coupled with a building and investment boom backed by decades of saved petroleum revenues.

* According to Washington-based Institute for International Finance (IIF), Saudi Arabia, the UAE and other Gulf Cooperation Council (GCC) nations are the world's largest producer of crude oil, accounting for about 20 per cent of global supply and 40 per cent of proven oil reserves.

* Revenues of the GCC countries are heavily concentrated in oil and gas and once these resources vanish they will face a lot of difficulties in financing the needs and stabilizing the economy.

2. Political Power - Not that influential

* Despite being the world largest oil producing region, political power has been a long term goal for the GCC.

* "The Political Economy of the Persian Gulf", an edited volume of academic articles that were delivered at the "Political Economy of the Gulf" research initiative that took place over two meetings in Doha on January 23-24, 2010 and December 11-12, 2010 says "Some Persian Gulf states have capitalized on the quick pace of globalized fiscal transactions, transforming themselves into important markets for foreign investment. Others have fallen victim to such risky speculation.

* This has led the Gulf Cooperation Council (GCC) to reevaluate the integrity of the "Dubai Model" of economic diversification, as they search for an ideal method to organize their economies and compete within the global order.

3. Single currency - KHALEEJI - becoming a dream.

* The GCC economy is solely dependent on oil as mentioned in the first point. Therefore, it would make more sense to have a unified currency and link it with oil, but unfortunately there is a direction to link it with USD.

* The board of the council, which will set a timetable for establishing a joint central bank and choose a currency regime, met for the first time on 30 March 2010.

* Kuwaiti Foreign Minister Sheikh Mohammed Sabah al-Salem al-Sabah said on 8 December 2009 that a single currency may take up to 10 years to establish.

* Following the announcement that the central bank for the monetary union would