EU/Tunisia: €300 million Macro-Financial Assistance package signed

European Commission

MEMO

Brussels, 4 September 2014

EU/Tunisia: €300 million Macro-Financial Assistance package signed

The European Union and the Tunisian authorities have completed the signing of the Memorandum of Understanding (MoU) and the Loan Facility Agreement related to the €300 million Macro-Financial Assistance (MFA) package for Tunisia. The documents were signed on behalf of the Republic of Tunisia by the Tunisian Minister of Finance, Mr. Hakim ben Hammouda, and by the Governor of the Central Bank of Tunisia, Dr. Chadly Ayari, and will now need to be ratified by the Tunisian Parliament. In July 2014, Siim Kallas i, at the time Vice-President of the European Commission responsible for Economic and Monetary Affairs and the Euro, had signed the MoU on behalf of the EU. In May the European Parliament and the Council of the EU approved the MFA for Tunisia.

The financial assistance, in the form of a medium-term loan, will be provided during the course of 2014 and 2015 in three equal instalments of €100 million each.

This assistance is part of the EU's and other international donors' efforts to help Tunisia overcome the severe economic difficulties caused by the combination of a weak external economic environment and the political transition process following the 2011 revolution. It will support the two-year comprehensive economic adjustment and reform programme agreed between Tunisia and the International Monetary Fund (IMF) in the context of the Stand-by Arrangement approved by the IMF in June 2013. The assistance is designed to help Tunisia move forward with its planned economic reforms while also underpinning its political reform efforts. Against this background the MFA is linked to the implementation of a number of economic policy measures as set out in the Memorandum of Understanding.

The assistance complements the increased financial resources provided by the EU to Tunisia under the European Neighbourhood and Partnership Instrument, and the EU SPRING programme to support partnership, reforms and inclusive growth in the EU's southern neighbourhood, among other forms of assistance.

Background on Macro-Financial Assistance

Macro-Financial Assistance is an exceptional EU crisis response instrument available to the EU's neighbouring partner countries. This operation 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.

The assistance package 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 (Decision 534/2014/EU).

For more information on past MFA operations please see:

http://ec.europa.eu/economy_finance/eu_borrower/macro-financial_assistance/index_en.htm