Tunis: Friday's hopes for a $1.9 billion IMF bailout package for Tunisia were dashed after President Kais Saied declared he would not follow "diktats" and that the necessary subsidy cuts might spark unrest.
In September, Tunisia and the IMF reached a loan agreement, but the country has already broken important commitments, and donors worry that its finances are getting further away from the numbers used to calculate the deal.
Without a loan, Tunisia's economy will collapse. This year, the country must repay its foreign loans, and credit rating companies have warned that it could go into default.
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Saied responded, "I will not hear diktats," despite the loan's conditions calling for reductions in public wage spending as well as food and energy subsidies. He stated that "Tunisians must count on themselves" as a substitute for the loan.
Saied seized most of the power in 2021, shutting down the legislature, installing a new administration, and establishing rule by decree. He justified these actions as being necessary to put an end to years of unrest and widespread corruption among the political elite.
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He has rejected what he views as foreign meddling and blamed corruption for Tunisia's economic woes.
The US and France, among others, have been demanding radical reforms from Saied in order to release the money, which has caused the bailout talks with the IMF to stall for months. Italy, a major country for migrants from North Africa, asserts that Tunisia needs immediate assistance to prevent the country's financial collapse.
Italian Prime Minister Giorgia Meloni warned last month that if Tunisia's financial stability is not preserved, a massive wave of migrants could reach Europe's shores.
