Germany issues $119m loan to support Tunisia banks

Tunisia and Germany yesterday signed a €100 million ($119 million) loan agreement to support budgets and reforms in the financial and banking sectors.

According to a statement distributed to the press, under the agreement Germany will grant Tunisia the loan on a concessionary basis with an interest rate that does not exceed 2.3 per cent, and a repayment period of 15 years, with a five-year grace period.

The loan agreement includes a €10 million ($11.9 million) grant which will be signed later to help implement agreed reforms.

The loan is in line with German pledges to grant Tunisia a low-interest loan to encourage financial and banking reforms worth €300 million ($357 million) over three years.

In a statement, the Tunisian Minister of Development, Investment and International Cooperation, Ziyad Al-Athari, said that “external financing is inevitable”.

The World Bank and Tunisia signed a $630 million agreement yesterday which includes $500 million to support the government budget and $130 million to support programmes for urban development and local governance.

The estimated budget deficit in Tunisia for this year is 4.9 per cent of GDP.

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