The European Commission praised its budget finance programme for Tunisia for its positive impact on macroeconomic stability, despite the Tunisian president’s controversial plans to have the central bank directly finance the government.
Responding to parliamentary questions on 5 March, Oliver Várhelyi, the EU’s neighbourhood commissioner, highlighted the programme’s success in areas such as macroeconomic stability, public finance management reforms, and migration control.
However, President Kais Saïed recently called on the Tunisian central bank to provide significant funds to cover the government’s budget deficit, a move that experts fear could lead to inflation and devalue the Tunisian dinar.
Despite objections from the central bank governor, a bill allowing the central bank to finance the treasury was passed in parliament. This decision has raised concerns about the potential for high inflation rates in Tunisia.
While the EU-Tunisia agreement was initially focused on migrant control, it has become a crucial economic lifeline for President Saïed. The financial aid provided by the EU has helped stabilize Tunisia’s economy and improve public finances.
In a statement, the EU confirmed a recent payment of €150m in budget support to President Saïed’s government, emphasizing its commitment to assisting Tunisia in enhancing its economic situation and business environment.
The funding is part of a larger programme worth up to €900m, which includes investments in renewable energy, railways, and internet infrastructure, in exchange for Tunisia’s cooperation in managing migration.
President Saïed’s controversial actions, such as dismissing the government and parliament and consolidating power through a revised constitution, have raised concerns about democratic governance in Tunisia.
Despite initial talks with the IMF for a significant loan, negotiations collapsed after Saïed accused the fund of imposing austerity measures. The EU has also engaged in similar agreements with other countries in the region, such as Mauritania and Egypt, with a focus on human rights issues.
