European Commission supports Tunisia with €100 Million
In order to help boost the economy of Tunisia, the European Commission, on behalf of the EU, recently approved the disbursement of a €100 million loan to combat poverty in the country. Reports explained that Tunisia is doing greatly in development but needs more support to efficiently secure its citizens welfare.
The MFA-I for Tunisia was proposed by the European Commission on 5 December 2013 and adopted by the European Parliament and the Council on 15 May 2014. A second MFA operation for Tunisia (MFA II) was adopted by the co-legislators on 6 July 2016.
In addition, the MFA-I programme is part of the EU’s comprehensive efforts to help Tunisia respond to the severe economic difficulties it is facing and the persistent political instability in the region. However, the operation has been reported to support Tunisia’s process of economic recovery both by providing concessional funding, and by encouraging the implementation of a number of important policy measures that will help in sustaining growth and development.
In response to the fund disbursement, Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs explained that the fund was to further strengthen their support to Tunisia:
“This disbursement, on the back of agreement on a new programme, reaffirms the EU’s continued commitment to support Tunisia in its efforts to further its economic and political transition. Notwithstanding an unstable regional context, Tunisia has demonstrated its determination to consolidate a fully-fledged democratic system, and to achieve prosperity for all its citizens. The EU firmly stands with Tunisia and its people.”
Reports confirmed that this first macro-financial assistance operation to Tunisia will be followed by a second MFA programme (MFA-II) in the amount of €500 million, also in the form of loans. This will no doubt go a long way to boost the Tunisian economy and at the same time, sustain the existing development.
It was confirmed that the disbursement of MFA-II funds will again be tied to the implementation of a number of policy conditions mutually agreed upon. However, the Memorandum of Understanding, which lays down these conditions, was signed in Brussels in April 2017. Meeting the conditions agreed upon will pave way for the disbursement of the second loan.
Similarly, reports confirmed that EU is ready to support Tunisia in numerous ways. The EU’s strategy of assistance to Tunisia also includes budget support programmes under the European Neighbourhood Instrument (ENI), of which Tunisia is a major recipient among the Southern Neighbourhood countries, as well as substantial loans from the European Investment Bank.
Further more, EU has adopted many instruments to assist countries financially. One of them is Macro-Financial Assistance which is an exceptional EU crisis response instrument available to the EU’s neighbouring partner countries. In addition, this instrument is complementary to assistance provided by the IMF. MFA loans are financed through EU borrowing on capital markets. The funds are then on-lent with similar financial terms to the beneficiary countries.
Tunisia government is highly appreciative of this support. It was confirmed that since the revolution of 2011, the EU has continuously and increasingly supported Tunisia in its transition to democracy. EU support to Tunisia has intensified financially. Its consistent financial support has helped to sustain growth and development in the country.