Financial rating agency Fitch downgrades Tunisia's rating to CCC-

The rating of the Tunisian debt was not brilliant, now Fitch lowers it a notch to CCC-. Tunisia was already on the list of issuers with a real risk of not being able to repay, according to the US agency. This new deterioration is therefore a sign of growing mistrust. The reason: the length of negotiations with the International Monetary Fund.

The financial rating agency Fitch is concerned about the Tunisian state's ability to raise funds to meet its needs. (Illustrative image) AFP

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Fitch is concerned about Tunisia's ability "to raise funds to meet its substantial financial needs". These needs have largely increased in relation to GDP compared to the period 2015-2019.

The country's budget depends on more than $5 billion in external funds, the equivalent of 10% of GDP. However, at least some of these funds will not be released until there is an agreement with the IMF. This agreement, Fitch thinks that it could, certainly, intervene by the end of the year, much later than hoped.

Discussions between Tunis and the IMF for a new loan of two billion dollars are difficult. The Washington institution is calling for the restructuring of a hundred highly indebted public companies and the lifting of subsidies on certain commodities. Kaïs Saïed refuses. The Tunisian president has proposed, in order not to submit to "foreign diktats", a new tax targeting the richest.

In the absence of this agreement with the IMF, Fitch estimates that only half of the $5 billion in external financing needed by Tunisia would be released this year.

European Commission President Ursula von der Leyen is due to visit Tunisia on Sunday with the leaders of Italy and the Netherlands. A visit focused on the economy and migration issues.

Three European leaders in Tunis

With our correspondent in Brussels, Pierre Benazet

This Sunday in Tunis, three European leaders - Italy, the Netherlands and the Commission - are going on an official delegation to meet President Kaïs Saïed. The Italian Prime Minister already visited Tunisia last Tuesday and is returning, accompanied by Mark Rutte and Ursula von der Leyen. They will talk about energy, economy and migration – at a time when the $2 billion loan granted by the International Monetary Fund in October is still deadlocked.

The Italian prime minister's trip to Tunis on Tuesday seems to have helped to obtain from President Kaïs Saïed ways to defuse tensions with the International Monetary Fund or at least to identify chapters on which it would be possible to find concessions. This return accompanied by two heavyweights of the European political scene as reinforcements looks like a charm offensive, especially since Giorgia Meloni, Mark Rutte and Ursula von der Leyen will propose to Tunisia a cooperation agreement on energy, economy and migration.

For Eric Mamer, spokesman for the European Commission, there is a sign of a "constructive dialogue". "The fact that the President of the Commission is visiting Tunisia accompanied by these two heads of government is in itself a sign that there is a constructive dialogue underway with the authorities. Be careful, I did not say that there would be an agreement during this trip, I said that discussions on an agreement would be at the center of this trip, "says Eric Mamer.

Politically, the cooperation agreement dangled by the three European leaders seems tailor-made to swallow the pill of concessions demanded of Tunisia by the International Monetary Fund.

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Read on on the same topics:

• Tunisia
• IMF
• Economy