WRITTEN QUESTION P-0214/03 by Olivier Dupuis (NI) to the Commission. Economic and financial situation in Tunisia.
Date: 2003-01-27
Institutions: European Parliament, Provisional data
Subjects: EU programme, Mediterranean third countries, Tunisia, association agreement (EU), banking system, development policy, economic situation, exchange of information, free-trade area

14.8.2003

EN

Official Journal of the European Union

C 192 E/163

Answer given by Mrs de Palacio on behalf of the Commission

(14 March 2003)

The Commission is aware of the oil and gas potential of the States which emerged from the former Soviet
Union, particularly in the Caspian Sea region. This interest was demonstrated, notably, with the
development in 1995 of the special Inogate programme within the TACIS framework. In addition, the
Commission is of course very sensitive to the key role which Russia now plays in supplying oil and gas to
the Union. The Commission has built up and formalised an energy dialogue with Russia, which is the
Community’s leading external supplier of gas and the Union’s second largest external supplier of oil.

Like the EU, the United States is seeking to promote geographical diversification of the international oil
supply, a diversification in which the countries which emerged from the former Soviet Union have a role
to play. The Commission believes the decision must remain with the companies concerned as to where to
lay pipelines, on the basis of economic and commercial considerations.

The Commission is not familiar with the contents of the work Mr Parvizi Amineh is about to publish.

The Commission would point out that in its Green Paper on Security of Supply (1), adopted in 2000, it
referred clearly to the problem of the Union’s energy dependency and outlined proposals for dealing with
that problem. In this context, the dialogue between producer countries and consumer countries, and
especially the closest countries, is of great importance for the diversification of the Union’s sources of
supply.

(1) COM(2000) 769 final.

(2003/C 192 E/200)

WRITTEN QUESTION P-0214/03

by Olivier Dupuis (NI) to the Commission

(27 January 2003)

Subject: Economic and financial situation in Tunisia

The Association Agreement between the EU and Tunisia is entering an important phase but very little
information is available about progress in the measures to support the establishment of a free trade area.
The need for much greater transparency reflects the importance of this Association Agreement. It is
therefore crucial that Parliament should be informed of the Commission’s assessment of the use made of
MEDA funding during the past seven years. The programmes for upgrading undertakings and important
sectors of the Tunisian economy have merely been the subject of expressions of self-satisfaction on the
Tunisian side, despite the fact that there are clearly very serious problems. As an illustration, the reform of
the banking system has been the subject of very little public information in Tunisia. The recent financial
scandal involving the Batam company and the Bonprix network has once again highlighted the problem of
doubtful and non-recoverable debts which is seriously jeopardising the reform of the banking system
supported by the European Union. This lack of transparency also encourages the development of large-
scale corruption in the circles of power, which has been the subject of intense comment in the foreign
press during the past few months.

What is the Commission’s assessment of the use made by the Tunisian authorities of MEDA support funds
during the past seven years? What information does the Commission have on progress and problems in
the reform of the banking sector? What information does the Commission have about the recent financial
scandals and the alleged development of illicit get-rich practices primarily among circles close to power
and what measures does it intend to take on this matter?

Answer given by Mr Patten on behalf of the Commission

(19 February 2003)

Tunisia occupies a special place in the MEDA programme, receiving a total of EUR 841 million over the
period 1995-2004 in the form of bilateral grants under MEDA I and II.

C 192 E/164

Official Journal of the European Union

EN

14.8.2003

The MEDA programme in Tunisia, consisting exclusively of grants, comprises 18 projects and programmes
in progress with two others in the pipeline for a total of EUR 440 million in commitments, 41 % of which
has already been disbursed. There are two distinct
financing arrangements for the MEDA-funded
programmes and projects: direct budgetary support to the Tunisian state (structural adjustment facilities
and sectoral support) and the financing of direct investment projects on the ground (rural development,
support for small and medium-sized enterprises, etc.). Last year was a record year for payments, which
totalled almost EUR 93 million.

Tunisia’s use of MEDA funds is by and large positive. The country’s uptake of funds is good thanks to the
policies implemented by the Government. This has made it possible to switch from classic assistance
programmes to more sophisticated instruments such as structural and sectoral adjustment facilities. As
from 2002, ‘third-generation’ programmes which provide support for good governance and civil society
have been included in Tunisia’s MEDA programming.

The economic results posted by Tunisia in recent years show that MEDA assistance is being provided
against a favourable development background.

The current and future difficulties with using MEDA in Tunisia are twofold: on the one hand, there is the
objective difficulty of implementing reforms such as the overhaul of sickness insurance or the ports sector
and, on the other hand, certain structural weaknesses in the Tunisian economy persist, for example in the
legislative and regulatory framework and investment services. These weaknesses need to be eliminated so
that the country can complete its economic modernisation and benefit fully from partnership with the
Union. It is too soon to say what impact the third-generation projects will have.

The Union is actively supporting the reform of the Tunisian banking system and, more generally, the
country’s financial system. As part of the structural adjustment operation under way, which is jointly
financed by the World Bank and the African Development Bank, the EU is giving its backing to: the
privatisation of two public banks; regulatory modernisation, which will help deal more effectively with the
very high level of bad and doubtful debts putting a strain on the banks’ balance sheets and holding back
their development; devising a strategy for developing the financial markets which will offer businesses
alternative sources of funding. The Community is also supporting training schemes for Tunisian central
bank and commercial bank staff to familiarise them with regulatory procedures and banking management
techniques used in EU banks.

The slowdown in economic growth in 2002 due to a number of external and internal difficulties has
affected the level of bad and doubtful debts in the banking system and probably halted the reduction in
those debts in the banks’ balance sheets.

Against that background, and given the preponderance of bank financing in the economy and of public
the
bodies in the total of bank credits, continuing the reform of
Commission’s core concerns in its economic cooperation with Tunisia. This reform will
in particular
involve adopting credit allocation techniques based on a serious assessment of a project’s economic and
financial profitability, a sustained drive to cut back provision for bad debts and reduce their level, and
developing alternative sources of financing for businesses.

the banking system is one of

The Commission is keeping a close eye on political and economic developments in Tunisia. It is aware of
the events surrounding the collapse of the Batam group. Batam, which includes the network of Bonprix
stores, developed too rapidly for its modest financial base. With the slowdown in domestic demand and
increasing competition, this fragile financial structure led the banks to suspend their support and the
company was declared bankrupt.

The Commission has no precise information on the illicit get-rich practices to which the Honourable
Member refers.