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The eurozone is the biggest importer of oil
in the world yet oil trading on the world market still takes place mainly
in US dollars.
Oil rich Arab countries have huge liquid
and real assets in the USA, however, these
investments have given them little political influence over US
policy in securing peace in the Middle East. If oil was partly issued in
Euros, some of this investment would flow into the EU, creating new jobs
and giving a huge boost to the Eurozone economies. Investment builds good
trading relations and similarly, good economic partnerships are able to
influence politics. The EU would consequently be a stronger broker for
settling many disputes that have set the Middle East ablaze.
The oil rich nations could sell their oil
to the USA in US$, to the EU in Euros and in either currency to the rest
of the world. This would allow them to invest both in the USA and Europe
increasing their influence with both power blocks. The Arab countries, in
particular, would gain substantial influence in the UN, in Washington and
the EU capitals. Oil trading in Euros would also boost and stabilise the
Euro against the US$. European interest rates would fall and it is likely
that a parity would be achieved and maintained for the two major world
currencies.
Let us hope that the EU will take a lead in persuading the oil rich
nations in the Middle East to formulate a scheme for the purchase of oil
in Euros. This would end economic stagnation in the EU, kick-start genuine
negotiations in securing a just settlement in Palestine and remove the
root cause of terrorism.
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