This is the second of three planned disbursements under the second Macro-Financial Assistance (MFA) programme to Tunisia that was adopted by the European Parliament and the Council on 6 July 2016. In total, the second programme is worth €500 million. With today's disbursement, the EU has now provided Tunisia with €650* million in MFA funds since 2015.
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: "This disbursement demonstrates the EU's continued commitment to supporting Tunisia and its people. For its part, the successful implementation of the ambitious reform package required for this disbursement to proceed is proof of Tunisia's determination to take the measures necessary to secure growth and sustain its economic recovery. The EU will continue to support this process."
MFA funds are made available in the form of low-interest long-term loans, conditional on the implementation of specific policy measures agreed in the Memorandum of Understanding.
Tunisia has fulfilled the policy commitments agreed with the EU for the release of the second disbursement under the programme. These included reforms to public financial management, the strengthening of social safety nets and the improvement of the business climate. These measures were designed to support fiscal consolidation and sustainable economic growth in Tunisia. The consolidation of democracy in Tunisia also remains a priority for the EU.
The second MFA programme was proposed following the terrorist attacks of 2015, which negatively affected Tunisia's economic recovery. This had a significant impact on the country's balance of payments position and ability to meet its financing needs.
Macro-Financial Assistance (MFA) is part of the EU's wider engagement with neighbouring countries and is intended as an exceptional EU crisis response instrument. It is available to the EU's neighbouring countries experiencing balance-of-payments problems. It 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. MFA grants come from the EU budget.
The second MFA programme for Tunisia was proposed by the European Commission on 12 February 2016 and adopted by the European Parliament and the Council on 6 July 2016. The policy conditions were agreed between the EU and Tunisia and laid down in the Memorandum of Understanding (MoU) and Loan Facility Agreement signed in Brussels on 27 April 2017.
The first MFA programme concluded in July 2017 and provided Tunisia with €300 million in loans.
The EU's strategy of assistance to Tunisia makes use of a wide range of financial and technical assistance instruments, including budget support programmes under the European Neighbourhood Instrument (ENI), of which Tunisia is a major recipient among the Southern Neighbourhood countries, benefiting also from substantial loans from the European Investment Bank.
Since the beginning of the 2011 Revolution, the Tunisian people have been working towards a modern democracy based on freedoms, economic development, and social justice. The European Union has been Tunisia's key partner in this process. Cooperation in a wide range of domains has been reinforced through a Privileged Partnership established in 2012. The EU's commitment to support Tunisia to help it achieve its ambitions was underlined again in the 2016 Joint Communication "Strengthening EU support for Tunisia" and the launch, by HR/VP Mogherini and President Essebsi, of the EU-Tunisia Youth Partnership.
Through the recent high-level events, the EU reiterated its commitment to the privileged partnership with Tunisia, and to support the country in its social and economic reforms. President Jean-Claude Juncker visited Tunisia on 25 October 2018 and Commissioner Johannes Hahn led a joint high-level EU-International Financial Institutions visit to Tunisia on 12 July 2018. The recent EU-Tunisia Association Council of 17 May 2019, co-chaired by Federica Mogherini, High Representative of the Union for Foreign Affairs and Security Policy, and Tunisian Foreign Minister, Khemaies Jhinaoui, highlighted the excellence of the privileged partnership, based on shared values and dynamic and diversified cooperation.
Nearly €10 billion has been made available to Tunisia in ongoing financial assistance delivered by the EU, its Member States, and its financial institutions through grants, loans, and equity. In addition to these funds, the EU also supports Tunisia with knowhow and by granting Tunisia access to the EU's programmes. The two MFA operations supplement the grant funding provided by the EU to Tunisia under the European Neighbourhood Policy and its financial instrument, the ENI. EU grant assistance to Tunisia since the 2011 revolution amounts to over €1 billion.
The EU's relations with Tunisia also go beyond financial assistance and development funding, through initiatives such as Creative Europe, which aims to supporting cultural diversity and the competitiveness of cultural industries both in European and in the European Neighbourhood.
*[updated at 14:35 on 24/06/2019]