Dubai’s move to suspend payments on its Dubai World conglomerate’s debt was planned and done in full knowledge of how the markets would react, Shaikh Ahmed said.

“Our intervention in Dubai World was carefully planned and reflects its specific financial position,” Shaikh Ahmad Bin Saeed Al Maktoum, Chairman of the Supreme Fiscal Committee, and President of the Dubai Civil Aviation Authority and chairman and chief executive of Emirates Airline and Group said in a statement.

“The government is spearheading the restructuring of this commercial operation in the full knowledge of how the markets would react. We understand the concerns of the market and the creditors in particular.

“However we have had to intervene because of the need to take decisive action to address its particular debt burden.”

Dubai’s government rattled financial markets on Wednesday when it said it would ask creditors of Dubai World for a debt moratorium of at least six months. Ratings agency Standard and Poor’s described this as a default.

Global stock markets fell sharply on the news, with European exchanges particularly hard hit. Paris and Milan each plunged by more than three percent in afternoon trading on Thursday.

Shaikh Ahmed said “we want to ensure resources are deployed in the full knowledge that they are used to enhance the businesses of the Dubai World Group, build on the restructuring that has already been taking place and ensure long term commercial success.

“Further information will be made available early next week.”

However, Shaikh Ahmed insisted that “unprecedented growth, in Dubai and across the UAE, over the past decade has helped lay the foundation for what is now a broad-based sustainable economy beyond just natural resources.”

“Like most global cities, Dubai has experienced its share of economic and social challenges in this global downturn,’ Shaikh Ahmed said. “No market is immune from economic issues. This is a sensible business decision.”