Written by 2:42 pm Europe Economy

Tunisia: EU Provides Economic Support

The government of Tunisia has secured a grant of €100 million from the European Union (EU) to support reforms in the country.

The fund, it was gathered, is for a programme aimed at supporting economic recovery efforts and building on the progress already made in the distribution of social aid to needy citizens and businesses.

Under the programme, the first immediate disbursement of €40 million will be granted to Tunisia.

The EU Ambassador to the North African country, Marcus Cornaro, and Tunisia’s Minister of Economy and Planning, Samir Saied, signed the grant agreement.

According to a statement from the EU, the rest of the sum will be disbursed based on the effective progress in the implementation of structural reforms initiated by Tunisia.

‘We want to support as best we can the economic recovery following the pandemic of Covid-19, and help Tunisian households that suffer the consequences of Russian aggression against Ukraine on energy and food prices’, Saied said in the statement.

About 60 percent of Tunisia’s population are poor or vulnerable and the Covid-19 pandemic has made the situation worse, according to the World Bank.

The bank noted in a report that the North African country’s growth and fiscal outlook is weaker than before as a result of the pandemic.

It is understood, according to the World Bank, that Tunisia’s recovery will require more stability and a joint national effort to steer the economy to the right path.

According to World Bank data, Tunisia’s economic performance decelerated after the 2011 revolution, resulting in a lost decade of growth, which was aggravated by the Covid-19 pandemic in 2020.

As growth and job outcomes worsened, Tunisia increasingly relied on the welfare state to meet citizens’ aspirations for better livelihoods.

More recently, the war in Ukraine have worsened socio-economic vulnerabilities.

As the country accumulated a debt exceeding 100 percent of its GDP, it recently obtained an agreement in principle from the International Monetary Fund (IMF) for a new loan of some two billion dollars to be disbursed in installments starting in December 2022.

In return, the government has committed to reforms including a gradual lifting of state subsidies for basic products (food and energy) and a restructuring of state-owned companies that have a monopoly in many sectors.

Photo source: Dennis Jarvis

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