Brussels, 28th March 2014
Civil society groups from Tunisia and Europe are urging the European Parliament to concentrate on debt relief instead of voting through a EUR 300 million loan to Tunisia, arguing that this will only add to the country’s huge existing debt burden.
The loan – which comes with numerous economic and trade conditions attached – is due to be voted on in plenary by the Parliament on the 16th of April. CSOs argue that only debt relief and assistance in the form of grants and capacity building for the Tunisian institutions can lead to the economic recovery and democratic reform that Europe has promised to support.*
Tunisia is already paying off debts generated under the Ben Ali regime to France and several multilateral development institutions such as the World Bank, the African Development Bank and the European Investment Bank. The latter received EUR 149 million (325 million Tunisian Dinars) in debt repayments in 2011 alone, and that figure is rising.
Last year Tunisia made repayments of EUR 330 million in international debt. In total it pays more to its Western creditors in repayments and interest than it receives in the form of loans or grants.
Fathi Chamkhi of RAID (a Tunisian association member of the Networks CADTM and ATTAC) said: “This EU loan – which is labeled as ‘assistance’ – would have to be repaid and would mean Tunisia is even more in debt. Tunisia’s existing debt burden was built up under the former dictatorship of Ben Ali, and a significant part of it can be labeled as ‘odious’ – as the European Parliament stated in its resolution of 10th May 2012 – and thus must not be put on the shoulders of the Tunisian people. Perhaps one of the most perverse aspects of this new loan is that 85% would be used to repay debt to EU Member States and the EIB, debt that has been generated by a corrupt, dictatorial regime.”
Kuba Gogolewski from CEE Bankwatch Network said: “Everybody knows that lending more to repay outstanding debt is a vicious circle. Debt relief is the only way to break this dynamic. Europe knows this very well. In early 1990s foreign Poland’s debt was cut in half by the Paris Club and the London Club. It provided the oxygen for economic recovery. Remarkably, it is not part of the deal this time.”
Bodo Ellmers from the European Network on Debt and Development (Eurodad) said: “Instead provide support in the form of grants with no strings attached. The young European democracies received generous assistance from the U.S. in the form of the Marshall Plan after World War II. Such assistance enabled European nations to have a fresh start. Today, it is Europe’s turn to support countries like Tunisia which are emerging from decades of dictatorial rule. The EU should not impose macroeconomic conditionality on their partners.”
CSOs are also calling on the EU to provide support for Tunisia in the form of grants and capacity building with no strings attached.
Notes to Editors:
Download the full press release here.
For further information, or to request an interview, please contact:
Kuba Gogolewski, North Africa Coordinator for Bankwatch// email@example.com // +32 2 893 10 35
Fathi Chamkhi // RAID (a Tunisian association member of the Networks CADTM and ATTAC)// +21 6 55 52 23 78
This press release is issued by the following organisations:
Banque Centrale de Tunisie, Dette extérieure de la Tunisie 2011, p20