Tunisia looks for EU credit

Tunisia is negotiating to borrow up to 500 million euros from the European Union and the United States has also expressed willingness to guarantee loans in 2014, the finance minister said.

Tunisia’s budget deficit should narrow to 6.5 per cent next year from 7.4 per cent of GDP expected in 2013, as the Islamist-led government seeks to impose strict new fiscal measures, Finance Minister Elyess Fakhfakh said.

The government is negotiating with the European Union for the granting of credit of up to 500 million euros, the minister said, adding that the United States has “voiced readiness to grant a loan guarantee to Tunisia in 2014”.

The minister also suggested Tunisia could seek more guarantees from European countries if required.

“We will request a guarantee from the French market in case of need of additional resources,” he said, according to the TAP state news agency website on Sunday.

The small North African country needs to further reduce its deficit, which worsened after the revolution and upheaval that cut into Tunisia’s foreign currency reserves, exports and foreign investments.

Tunisia’s economy will expand less quickly than hoped this year, with GDP growth forecast at 3.6 per cent compared to 4 per cent previously, the minister said last month, putting partial blame on slower growth in Europe.

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