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Vol 55 No 20

Published 10th October 2014


Critical votes and toxic loans

Ahead of key national elections, concern is mounting about the legacy of bad loans from the time of President Ben Ali

Dealing with bad debts from the Zine el Abidine Ben Ali era which threaten the banking system has proved so problematic that the government has been contradicting itself. On the morning of 27 September an official announcement declared that that the cabinet, chaired by technocratic Prime Minister Mehdi Jomaa, had passed a decree to release 100mn dinars (US$55mn) on 13 October to shore up Banque de l'habitat (BH) and the Société tunisienne de banque (STB). But the decree, according to interim Minister of Finance Hakim Ben Hammouda, was withdrawn at the last minute with no correcting public statement being issued. Parliament has also failed to set up a ‘bad bank’ entity to absorb a rising tide of toxic loans. Enabling legislation has been stuck in parliament for two years now, with many blaming the individuals and institutions owing the unpaid loans for obstructing the measures.

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