“The European Union is emerging as a major center of Islamic finance, based on Islamic Shariah law, and which critics say amounts to “financial Jihad” by Islamists intent on Islamifying the West.
The spectacular growth prospects for the Islamic financial services industry in many European countries is being fuelled by Muslim mass immigration; despite a difficult economic climate on the continent, Islamic banking is growing faster in Britain, France and Germany than it is in many Islamic countries in the Middle East and Asia.
The key role that Europe is playing in establishing Islamic finance in the West was the central theme of the 8th Islamic Financial Services Board Summit, an annual conference that promotes Islamic banking around the world. Hosted by the Central Bank of Luxembourg from May 10-13, 2011, it was the first time the event was held in a European country.
Proponents of Islamic finance depict the Islamic banking system as a morally superior alternative to the Western banking model. Structured around a strict code of ethics and based on the Koran and Islamic Shariah law, Islamic banking is (in theory) supposed to make it possible for Muslims to conduct financial transactions while observing Islamic prohibitions against charging interest (riba), risk or uncertainty (gharar) and/or investing in forbidden (haram) products and activities such as alcohol, entertainment and gambling.
Critics of Islamic finance, however, point out that although there are some practices in conventional capitalist finance that do not involve charging interest (for example, venture capital or investing in stocks) or risk or uncertainty (for example, investing in government bonds), it is impossible to have a financial and banking system that avoids both. As a result, much of contemporary Islamic banking is shrouded in a variety of deceptive legal fictions and subterfuges (hiyal) that enable Muslims to engage in business transactions that circumvent and evade Shariah prohibitions on interest…”