The signing of a Free Trade Agreement (FTA) between the GCC and Europe will be particularly good for small to medium sized businesses, said an EU expert.

Speaking on the sidelines of the Crans Montana Forum, Eurochambres president Pierre Simon said the European chambers favoured a multilateral agreement like the proposed FTA with the GCC over unilateral agreements with individual countries.

'Unilateral deals work well for large corporations who have the resources to handle all the legal and technical details of foreign trade, but for medium sized companies that is a problem,' he said.

'With a multilateral agreement you get less bureaucracy which suits the SME sector.'

'The European chambers are very keen to see that FTA deal signed as it will see an increase in the economic relationship between out two blocks that will provide opportunities for both European and Gulf businesses,' he said.

'Bahrain is a particularly good place to do business with the rest of the Gulf region because you can set up a business here without the need for a sponsor.'
He said the country already had strong ties with Europe and had set up a French Arabian business school a year ago.

The issue of a single currency in the GCC would require the states to get a consensus on rules and discipline, he said.

'When we accepted the single currency in Europe we had a lot of practical topics to face, particularly the German fear of inflation because they had gone bankrupt twice in the last century,' he said.

'When you create a single currency there are a lot of decisions that have to be implemented and you have to look not only at monetary policy but also harmonisation of the economies, budgets and inflation and you have to have the member states accept this.

'You need consensus on both rules and discipline,' he added.-TradeArabia News Service