TUNIS (Reuters) – Tunisian President Saeed said on Thursday he would not comply with the International Monetary Fund’s “absolute orders”, rejecting conditions for financial aid negotiated by the IMF.
The country reached a working-level agreement with the IMF in September last year for $1.9 billion in financial aid, but since then it has failed to meet key conditions for aid, and among donors, Tunisia’s finances are a prerequisite for financial aid. There is an emerging view that there is a large divergence from the conditions.
Without financial aid, the country is expected to face a full-blown external balance crisis. Much of the debt is domestic, but the country’s external debt is set to mature by the end of the year, with several rating agencies pointing to the possibility of default.
Asked by reporters if he would accept conditions for financial assistance, such as cuts in food and energy subsidies and lower salaries for civil servants, Said said, “I will not listen to absolute orders.” He noted that in 1983 there were riots and deaths after the price of bread was raised.
“Tunisians need to rely on themselves,” he said when asked what alternatives to IMF financial assistance would be. Administration officials have pointed out that there is no alternative to IMF financial aid.
The country’s foreign currency bonds fell 4.6 cents after the president’s remarks. Many stocks are trading at near six-month lows.
