Italy vows help with IMF in bid to stabilize Tunisia

Italy on Thursday vowed a host of investments in Tunisia and help negotiating an International Monetary Fund bailout as Rome seeks to stabilize the North African country's economic crisis and stem the increased number of migrants coming to the European nation.

Foreign Minister Antonio Tajani outlined Italy´s efforts and pledges during a meeting with his Tunisian counterpart, Nabil Ammar, who insisted that Tunisia has seen growing numbers of African migrants arriving from the Libyan border and needs economic help.

"Our proposal is very clear to the Monetary Fund and our interlocutors, American and European. Our proposal is to start financing Tunisia through the Monetary Fund, and deliver, after a first tranche, a second tranche as the reforms proceed. But not utterly conditional on... the conclusion of the reform process. Start financing, encourage the reforms."

"We are finalising an agreement to bring 4,000 Tunisian workers to work in Italy, who will be trained in Tunisia. They are the ones, the workers, and Tunisia is the first country with which we are implementing this project, outside the decree, i.e. Click Day." added  Antonio Tajani.

The Organization for Economic Cooperation and Development says Tunisia is experiencing its worst crisis in a generation, with inflation hovering around 11% and food increasingly scarce. The government is negotiating a $2 billion to $4 billion loan with the IMF to cope with a budget deficit aggravated by the COVID-19 pandemic and fallout from Russia´s war in Ukraine.

But in return for a deal, Tunisia would have to commit to painful reforms, including shrinking the public administration sector - one of the world´s largest - which eats up about a third of the state budget. The IMF also is demanding the gradual lifting of subsidies and the privatization of state-owned enterprises, which implies massive layoffs and a worsening of unemployment.

Tajani vowed to work on Tunisia´s behalf in negotiations with the IMF, repeating Italy´s proposal that the loan be delivered in two tranches and not be fully dependent on all reforms being in place. Italy wants a stable and prosperous Tunisia because it has become a major point of departure for some of the 31,000 migrants who have reached Italy so far this year.

"For us, the fundamental point is to guarantee the stability of Tunisia," Tajani said.