European Commission to grant Tunisia €600m to face covid-19 impacts

The European Commission will grant Tunisia a €600 million loan to help the country limit the economic fallout of the coronavirus pandemic.

Tunisia is part of ten European Union enlargement and neighborhood partners for whom the European Commission proposed a €3 billion macro-financial assistance (MFA) package.

Tunisia has forecast an economic recession estimated at 4.3 per cent due to the pandemic, which has forced the government to put the country on lockdown, suspending most economic activities.

In the tourism sector, the country’s second largest GDP contributor after agriculture, the Tunisian government projected about $1.4 billion-loss in terms of revenues and the loss of some 400,000 jobs.

The North African has confirmed over 900 cases including 38 deaths.

The €600 million loan from the European Commission adds to €250 million pledged by the European Union, €50 million by Italy and $745 million already approved by the IMF.

The European Commission’s proposal comes on top of the ‘Team Europe’ strategy, the EU’s robust and targeted response to support partner countries’ efforts in tackling the coronavirus pandemic, the commission said in a press release.

The MFA funds will be made available for 12 months in the form of loans on highly favorable terms to help these countries cover their immediate, urgent financing needs.

Together with the International Monetary Fund’s support, the funds can contribute to enhancing macroeconomic stability and creating space to allow resources to be allocated towards protecting citizens and mitigating the coronavirus pandemic’s negative socio-economic consequences.