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Tunisia

Saïed chooses isolation after returning EU cash

The President has turned down €60m of funding from Europe and is no closer to agreement on a $1.9bn IMF programme

It is increasingly hard to see where Tunisia will source financial support in the coming months after President Kaïs Saïed rejected funding from the European Union. Last week Saïed's government returned €60 million to the European Union, describing the sum as 'derisory' and 'without respect', a move that has thrown the €785m 'cash for migrant control' programme into doubt (Dispatches 11/10/23, Erratic Saïed jeopardises cash for migrants deal with Brussels).

The money, which was formally requested by Finance Minister Samir Saïed on 31 August, was intended to be part of the first disbursement of a €127m tranche, which included money earmarked under the EU-Tunisia memorandum of understanding signed in July.

The deal with the European Commission, which had included budget support and investment in two infrastructure projects, had been viewed as an alternative – at least in part – to an International Monetary Fund loan. That, it appears, is also off the agenda.

Last week, Jihad Azour, Director of the Middle East and Central Asia Department at the IMF, told reporters in Marrakech that the Tunisian government had not proposed an alternative to the $1.9 billion IMF programme on which tentative agreement was reached with Tunisian officials last year.

President Saïed has dismissed the terms offered by the IMF as 'foreign diktats that will lead to more poverty', and has contended that privatisation of state assets, new wealth taxes and subsidy cuts will be sufficient, despite warnings from economic experts that Tunisia could quickly face a balance of payments crisis without international support (Dispatches 11/4/23, President Saïed picks a fight with the Fund).

Azour, who urged the Tunisian government to reform its fuel subsidy, which mainly benefits the wealthy in its current form, added that an IMF mission is due to visit Tunisia in the coming months to assess economic developments in the country but did not specify a date.



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