24th Feb 2024


How the EU can help Tunisia avoid a total economic crash

  • Tunisia's president Kais Saïed (here pictured with Ursula von der Leyen), has dissolved parliament, proceeded to rule by decree, and dismissed international assistance — rebuffing 'foreign diktats' to appeal to Tunisian nationalist feelings (Photo: European Union, 2023)
Listen to article

Tunisia possesses both the necessary ingredients and the capacity to invigorate its economy to become a 'Mediterranean tiger'. Yet, this potential has remained largely untapped since the dawn of its 2011 uprising. One of the key reasons being the political class' wilful ignorance and internal conflicts, which has become increasingly intolerable to ordinary Tunisians.

Tunisia, once the lodestar of democracy in the Arab world, has descended into rampant authoritarianism, economic shortsightedness, and an inability to rein in its informal economy. These factors have eroded the country's foundations and, today, Tunisia seems incapable of resurfacing without international intervention.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

However, president Kais Saïed, who dissolved parliament, and proceeded to rule by decree, has dismissed international assistance, rebuffing "foreign diktats" to appeal to Tunisian nationalist feelings.

He rejected the stipulations set forth by the International Monetary Fund, which entail among others, restructuring around 100 state-owned enterprises and eliminating state subsidies on basic commodities. By choosing this path, he is staking the country's future, particularly that of the poor.

Tunisia's national debt is growing close to 100 percent of GDP. To balance its 2023 budget, the country needs to secure just over €7bn, €5bn of which could only come from external sources.

eeping this in mind, the president of the EU commission, Ursula von der Leyen, has offered to support Tunisia with over €1bn of aid in return for better border control and measures against human smuggling "as soon as the necessary agreement is found."

This renewed EU partnership is supposed to provide Saïed a lifeline to rescue the country from the self-destructive cycle it is caught in.

However, the signing of the memorandum of understanding on 16 July 2023, largely inspired by the Italian "Mattei Plan", will hardly help Tunisia. The so-called "Process of Rome" led by the Italian far-right is a copy of another agreement signed by Italy with Libya aiming at containing migrants, militarily.

In reality, Tunisia's socio-economic situation is so precarious that it risks flaring up at the slightest misstep. Hence, Tunisia's dilemma when faced with Italian prime-minister Georgia Meloni's tempting proposal to become the EU's coastguard under European remuneration.

Just a few weeks after the Italian-led EU offer of a deal on migration, Tunisia deported hundreds of sub-Saharan migrants across the border into the hot Libyan desert.

Reports and direct testimonies allude to instances of physical abuse, forced deportations, exploitation, systemic discrimination, and denial of essential services like food, water and healthcare. This rise in racially motivated violence had begun after Saied's speech last February in which he spoke of the "hordes of irregular migrants from sub-Saharan Africa" who come bringing "violence, crime, and unacceptable practices".

It's evident that a short-term Meloni fix does not serve Tunisia's best interests. Instead, the country requires a comprehensive, long-term agreement with the European Union, one that encapsulates issues of both legal and illegal migration, mobility, education, and skills.

I believe the need of the hour is to preserve Tunisia's manufacturing base and halt the brain drain. We need investment in innovative entrepreneurship and new financing models.

The current circumstances for Tunisian companies are fragile. Sales are concentrated in a small local market, where purchasing power is shrinking by the day; opportunities for development and internationalization are limited by existing legal, administrative and financial barriers.

And all of this is happening in the absence of public policies that could help emerge from the crisis in the short to medium term. To mitigate this vulnerability and to prevent a complete economic collapse, it is crucial for Tunisian companies to pursue international diversification in the near term.

Conversely, it is necessary to broaden the range of financing and support mechanisms for innovative entrepreneurship in manufacturing, which is globally recognized as a strategic sector. On one hand, it generates local prosperity through the development of technology and intellectual property, while on the other, it draws both local and international talent, effectively countering the brain drain that has escalated to nearly pandemic proportions in Tunisia.

These companies, primarily SMEs and innovators, find themselves trapped between three perpetually expanding forces.

Firstly, there is the state and its administration, unable to implement reforms and sustaining their lifestyle chiefly through skyrocketing tax pressure and domestic financing. This situation depletes market liquidity, stifles investment, and even hampers financing of projects.

Secondly, the cash economy dominates the country's principal sectors and, by allying with those in power, impedes any transformation that would challenge the status quo that favours it. Lastly, the shadow economy, capitalising on the import restrictions enforced by the state to hoard foreign currency, is seeing its domain broaden generating ever more extensive corruption circuits involving the population, businesses and local administrations.

As we witness the descent of a once hopeful budding democracy into authoritarian rule, Tunisian decision-makers appear to be trapped in a quicksand of paralysis.

The president appears inept at cultivating favourable conditions to jumpstart the economy. His efforts are confined to minor and populist undertakings with limited impact, attempting to obscure this state of affairs with diversions. The latest being his inflammatory and discriminatory discourse against sub-Saharan migrants. Such populist policies will not help Tunisia rise from its economic abyss. Nor will EU-Meloni's latest deal offer a sustainable and long term recovery.

The policies of the US and EU towards Tunisia must chart a fresh course, working collaboratively to design a novel toolkit for democracy and economic development. This will help safeguard freedoms in Tunisia and ensure their sustainability.

Author bio

Ghazi Ben Ahmed is the founder of the Brussels-based Tunisian think tank Mediterranean Development Initiative (MDI).


The views expressed in this opinion piece are the author's, not those of EUobserver.

No details on new EU aid to curb migrants from Tunisia

The European Commission on Monday (12 June) said it cannot yet release details of €105m to prevent migrants from leaving Tunisia. But similar past proposals for Tunisia in the past may offer some clues.

Tensions and a murder at Tunisia's departure port for Lampedusa

Sfax, Tunisia's second-largest city, has become a hub for sub-Saharan migrants because it is the closest departure point for Europe, just 190km from the Italian island of Lampedusa. That's created tension with locals, who often view them as adversaries.

Towards a new EU relationship with northern Africa

Migration, terrorism and energy — three 'crisis' topics — have preoccupied European policy and their societies' view of their neighbourhood in northern Africa for a long time.

Ukraine refugees want to return home — but how?

Fewer than one-in-ten Ukrainian refugees intend to settle permanently outside Ukraine, according to new research by the associate director of research and the director of gender and economic inclusion at the European Bank of Reconstruction and Development.

Latest News

  1. EU rewards Tusk's Poland on rule of law with €137bn
  2. UK-EU relations defrosting ahead of near-certain Labour win
  3. EU paid Russia €420-per-capita for fossil fuels since war began
  4. After two years of war, time to hit Putin's LNG exports
  5. Creating the conditions for just peace in Ukraine
  6. Energy and minerals disputes overshadow new EU-ACP pact
  7. Germany speeds up Georgia and Morocco asylum returns
  8. How Amazon lobbyists could be banned from EU Parliament

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Stakeholders' Highlights

  1. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  2. UNOPSFostering health system resilience in fragile and conflict-affected countries
  3. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  4. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  5. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  6. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA

Join EUobserver

EU news that matters

Join us