its and profit-sharing which complies to the Islamic laws is rather wan. It all sounds like pragmatism to me but I am not here to pontificate about the ins-and-outs of Islamic finance. To understand why this is not a sovereign (currency issuing) default you have to come to terms with the concept of an emirate , which "is a political territory that is ruled by a dynastic Muslim Monarch styled emir". The United Kingdom announced in 1968 and reaffirmed in 1971 that it would end its treaty relationships with the seven Trucial Coast states, which had been under British protection since 1892. Following the termination of all existing treaties with Britain, on December 2, 1971, six of the seven sheikhdoms formed the United Arab Emirates (UAE). The seventh sheikhdom, Ras al Khaymah, joined the UAE in 1972. So the UAE is a federal state with seven federal emirates. Each emirate is a constitutional monarchy and the monarchs determine in an electoral college the UAE President and Prime Minister. The UAE government has a federal budget and monetary policy is conducted via the central bank . To understand how the central bank operates in the UAE this document is useful. The Federal National Council (FNC) approves the UAE budget which is produced by the Ministry of Finance. The federal budget accounts for around 25 per cent of all UAE fiscal transactions, with the individual emirates conducting their own affairs, accounting for the rest. Given the income (GDP) of the UAE is