France Offers to Help Tunisia With Neoliberal Reforms as Tunis Weighs Fourth IMF Loan in 10 Years

Africa

Despite the formal end of colonial rule decades ago, Paris retains close economic and military ties with many of its former subject nations, providing aid in exchange for investment opportunities. On Thursday, france paused its eight-year war against Islamist rebels in Mali and in April offered support to Chad amid death of its ruler, Idris Deby.

In Tunis on Thursday, French Prime Minister Jean Castex pledged economic and medical help for Tunisia, which is struggling to patch holes in its national budget amid deep debt and a COVID-19 outbreak that is pushing its health system to the limit.

Castex told Prime Minister Hichem Mechichi france was prepared to help Tunisia, a former colony, with neoliberal-style economic reforms necessary for the country to get another loan from the International Monetary Fund (IMF). 

Last month, Tunisian Central Bank  governor Marouane Abassi pleaded before the Tunisian Parliament to appeal to the IMF for a $4 billion loan necessary to patch its budget.

He cautioned that an alternate proposal – financing the deficit using the central bank – would lead to a “Venezuelan scenario” of hyperinflation.

“The Central Bank is not ready to open the floodgates to finance the budget, because within four months we would find ourselves with triple-digit inflation,” Abassi said.

Tunisia’s fragile economy took a nose-dive during the COVID-19 pandemic, with gross domestic product shrinking by 8.9% in 2020 and unemployment…

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