- To access the money, Tunisia must sign a memorandum of understanding with the EU Commission pledging structural reforms and sound management of public finances.
- Tunisia will also have to ensure effective democratic mechanisms, rule of law and respect for human rights, all of which are to be monitored by the EU.
- When this is done, Tunisia will have the opportunity to take up the loans within a period of two and a half years.
European Parliament announced in a press release that it had approved a plan to lend Tunisia EUR 500 million on 'favourable terms' under certain political conditions to help it reduce its external debt and consolidate its democratic mechanisms after a vote by Members the European Parliament backed the plan by 561 votes to 76, with 42 abstentions on Wednesday, June 8. The European loan comes less than a week after the United States signed a loan guarantee agreement with Tunisia on June 3, which 'will allow Tunisia to access up to USD 500 million in affordable financing from international capital markets' according to a U.S. State Department notification. It is the third such loan guarantee the U.S. has extended to Tunisia including one for USD 485 million in 2012 and another of USD 500 million in 2014. While in May the World Bank Group’s Board of Executive Directors signed off on a new Country Partnership Framework to support, the new five-year strategy will provide up to 5 billion USD in loans for Tunisia to restore economic growth and create jobs and is intended to support the Tunisian government’s own Five-Year year development plan. The IMF’s Executive Board, on Friday, May 20, approved a 4 year USD 2.9 billion loan to Tunisia “to support the country’s economic and financial reform program.” The European Union press release added: