World Tunisia's new government faces hard road to rescue package
Thousands rally to back Tunisian president after power grab
More than 5,000 demonstrators showed support on Sunday throughout Tunisia for President Kais Saied whose power grab has stirred controversy in the birthplace of the Arab Spring. With an estimated 3,000 of them rallying in the capital Tunis, the pro-Saied crowd exceeded that which gathered a week earlier to oppose him. "We are all Kais Saied, we are all Tunisia," they chanted on Bourguiba Avenue, the main thoroughfare in central Tunis, also shouting that "the people want the dissolution of parliament".
By Angus McDowall and Marc Jones
TUNIS/LONDON (Reuters) - Tunisia's new government said this week that balancing public finances will be a priority, but it and President Kais Saied face a hard road to convince markets and foreign donors they are ready to hash out a rescue package.
Even before the pandemic Tunisia was struggling to bring its public debt and fiscal deficits onto a sustainable trajectory, and has since been hit hard by a lockdown and the collapse in tourism. By the summer it needed urgent help.
Can Democracy be Saved in Tunisia? | Opinion
We hope that President Joe Biden's commitment to foreign policy that supports democracy and confronts dangerous populism will ensure that Tunisia is not overlooked in its hour of need. Khaled Chouket is president of the Tunis-based Arab Institute for Democracy and former minister and spokesperson of the Tunisian government from 2015-2016.The views expressed in this article are the writer's own.
Then, talks with the International Monetary Fund (IMF) for a loan that could unlock bilateral aid from major donors were derailed when Saied suspended parliament, sacked the prime minister and took power in what his opponents called a coup.
It has taken Saied 11 weeks to appoint a new government under Prime Minister Najla Bouden - one essential step towards restarting IMF talks. But he has not yet laid out a plan to restore normal constitutional order as donors demand.
Donors also want Tunisia to set out a series of credible economic reforms, potentially involving subsidies, the public sector wage bill and loss-making state companies, that would curb the deficit and debt.
Analysis: Dirt racing pedigrees translate to road course success
The "feel" of dirt open-wheel racing tends to translate to NASCAR's road courses, leading to success.Five of Tim Richmond’s 13 career race wins took place on road courses, including four at the 2.62-mile Riverside Speedway in California. Jeff Gordon secured 10 road course victories, with six in a row emanating from 1997-2000. Tony Stewart earned a combined eight wins at Sonoma and Watkins Glen, including his final Cup Series triumph in 2016 at the former.
"The risk of a sovereign debt restructuring has increased, in our view," said Petar Atansov of Gramercy, a well-known distressed debt fund, saying Tunisia's political problems made it less likely to deliver on reforms needed for an IMF loan.
Market concerns are visible in Tunisia's bond yields - a reflection of how much the government would have to pay to borrow in international capital markets - which have climbed to nearly 16%.
That is more than double what Pakistan has to pay, though it also has a B- credit rating and relies heavily on IMF help, and is much higher than the 9% paid by Ecuador, which has recently defaulted.
Video: G20 leaders pledge support for Afghanistan (Reuters)
"They clearly need to get an IMF programme, rebuild their resources and then tap the market in three years or so," said Viktor Szabo at ABRDN in London, which holds Tunisian debt.
Slow progress on budget package with deadline weeks away
Oil has stopped flowing from a ruptured pipe near Huntington Beach, Calif., but it could be years before a complete picture of the oil spill’s environmental impact emerges. Here’s what crews are doing on the ground to protect local wildlife. Photo: Mario Tama/Getty Images
Last week Central Bank Governor Marouane Abassi warned that financing the budget internally carried economic risks including boosting inflation, reducing the bank's reserves and weakening the currency.
"When would there be a failure? Nobody has a clear picture of Tunisian finances," said a diplomat in Tunis.
Abassi is emerging as a central figure in efforts to save the economy and is preparing proposals to discuss with the IMF, said the diplomat.
Last week the governor said Tunisia's friends stood ready to help it. But they may have little support to offer without an IMF deal in place.
That would likely require two politically contentious manoeuvres that Tunisia has not yet laid out - an inclusive constitutional roadmap and a set of credible economic reforms.
Saied has brushed aside much of the 2014 constitution and said he can appoint a committee to amend the document and put it to a referendum, adding he would hold a dialogue on it with Tunisians.
So far he has shown little inclination to work with Tunisia's other major political or civil society forces - something that could scupper his chances of getting donors on board.
Recognising his government to the extent of agreeing loan deals without the inclusive process they have called for "would be a complex question", said the diplomat.
Going it alone would also leave Saied without the broad-based support he may need from unions or political parties whose overtures he has so far spurned for the sort of unpopular reforms that could be required for a deal.
His public pronouncements have focused not on readying Tunisians for a looming financial crisis and steps that may be needed to avert it, but on extra money he hopes to raise by tackling corruption.
Successive Tunisian governments have stumbled on the difficulty of agreeing unpopular reforms after a decade of perceived economic decline. To do so now, Saied may have to push aside his apparently unilateral instincts and start working with others.
(Reporting by Angus McDowall and Mark Jones, additional reporting by Tarek Amara; Editing by Alex Richardson)
As housing concerns mount, cities, states steer billions in COVID funds to address crisis .
Mayors are tapping COVID-19 funds to take on an affordable housing crisis. But some say real progress depends on Biden's $3.5 trillion spending bill.City leaders set a lofty goal to rehouse each of Austin's 3,000 homeless citizens in three years – but how to pay for the $515 million undertaking remained a question.