Tunisia Refuses To Cancel Support for the IMF Loan

Tunisian President, Kais Saied, described the conditions of the International Monetary Fund regarding the ongoing negotiations on a loan agreement as “a burning match next to highly explosive materials,” referring to the dispute related to the review of the government subsidy system.

The specific loan, at a value of $1.9 billion, was approved at the IMF’s expert level, but negotiations later faltered. Because of the package of reforms required for the Tunisian economy, mainly related to the subsidy system towards its review or gradual abolition.

Saeed explicitly refuses to cancel the support that hundreds of thousands of poor families benefit from, claiming that it threatens civil peace. “Civil peace has no price,” he said in a press statement published by the Tunisian presidency.

In a phone call with his French counterpart, Emmanuel Macron, details of which were published by the Tunisian presidential office, Saeed described the terms of the International Monetary Fund agreement as “a match that burns along with highly explosive materials.”

He added, “Another scenario can be presented based on employing taxes on those who do not deserve support to finance the support fund so that it is support that achieves the desired justice.”

Saeed suggested “organizing a summit-level meeting with the participation of all concerned countries.” To discuss the issue of illegal immigration across the Mediterranean.

tax increase

Saeed said that raising taxes on the rich could be an alternative to difficult social reforms, as part of efforts to obtain a financial rescue package from the International Monetary Fund.

The International Monetary Fund said that Tunisia needs to put its financial situation on a more sustainable path, after expressing its concern earlier; Because of the volume of wage payments to state employees, subsidies and a low tax base, support for non-profit state-owned enterprises.

And Tunisian official media had reported the day before yesterday that the Italian Prime Minister, Giorga Meloni, would visit Tunisia next week.

Although the initial agreement was based on proposals submitted by the Tunisian government, Saied described the financial reforms stipulated in the agreement as “dictates.” The agreement cannot be passed and the loan paid without the approval of the Tunisian president.