EU considering major Tunisia aid package as migration surges

The European Union said on Sunday it may loan Tunisia over 1 billion euros ($1.07 billion) to help develop its battered economy, rescue state finances and deal with a migration crisis, with most of the funds contingent on it agreeing painful economic reforms.

The offer was announced by European Commission President Ursula von der Leyen during a visit to Tunisia along with Dutch Prime Minister Mark Rutte and Italian Prime Minister Giorgia Meloni, who is anxious about migration across the Mediterranean.

Their effort, spurred by increasing concerns in Europe about Tunisia’s economic stability, is part of a last-ditch push by major donors to persuade President Kais Saied to agree to the terms of a $1.9 billion International Monetary Fund (IMF) bailout.

Saied has so far rejected the proposals, originally made by his own government, to cut subsidies and restructure loss-making state-owned companies, saying this risks a social explosion.

Donors say time is almost up for Tunisia to agree to the loan and avert a collapse in its state finances, but they are unwilling to lend it money without the reassurance of fully costed reforms that could allow it to repay its debts.

Reuters

Tunisia's President Kais Saied shakes hands with European Commission President Ursula von der Leyen in Tunis, Tunisia June 11, 2023. Tunisian Presidency/Handout via REUTERS

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