Abu Dhabi helps Dubai deal with debt… but for how long?

With Dubai’s debt situation creating shock waves across global economic markets, resulting in reduced confidence levels, many people had began fearing another banking meltdown with European banks said to be exposed to anywhere up to 50% of Dubai’s world debt.

The oil-rich Abu Dhabi have offered a lifeline to Dubai, to the sum of £6billion. Despite not being the blank cheque that many were hoping for, the news has come as a welcome relief for investors all across Europe, especially in the UK. The FTSE 100 has risen nearly 1% since the news, however a greater impact was visible with the London Stock Exchange.

The London Stock Exchange, which is over 1/5 owned by the UAE company Borse Dubai, has responded to the news with a rise of 7%. This shows that confidence seems to have returned, however this may just be temporary.

Abu Dhabi have been on record as saying they will ‘pick and choose’ how and when to help Dubai, however with the Debt estimated to be $75billion, with some experts fearing even higher, just how long will it be before more money is needed to help bail out Dubai?

About the author: Thomas Yates

After finishing his Business Management degree Tom was looking to join a progressive company where he had the opportunity to have his own ideas listened to and implemented. It was a case of being in the right place at the right time as Rivermead Global were looking at taking somebody on and in 2009 Tom joined the company. If you are looking at buying a property in Egypt or Turkey you have come to the right people. Read our Ultimate Guide To Buying Property In Hurghada