Summary:

On Tuesday, 6 June 2023, Italian Prime Minister Giorgia Meloni visited Tunisia with an International Monetary Fund (IMF) loan deal and the issue of irregular migration on the agenda.

The visit comes as Italy has simultaneously championed Tunisia moving forward with the agreed-upon IMF deal while also stressing the need for more urgent financial assistance to Tunisia as the loan negotiation process has dragged on.

Meloni and Italian Foreign Minister Antonio Tajani have stressed their support of an IMF deal and a vision of economic reform in Tunisia, but have been vocal about the short-term impacts of Tunisia’s economic crisis as irregular migration has spiked. The leaders have called for a more immediate bailout with the expectation that reforms could follow – what they described as a more “practical” and “flexible” approach to assisting Tunisia.

During the meetings in Tunis, Meloni reportedly pledged over $700 million dollars in financial support for efforts which could ultimately secure the IMF loan deal.

Meloni met with President Kais Saied as well as Prime Minister Najla Bouden. During their two-hour meeting, Saied reportedly praised Meloni for her forthrightness and willingness to speak directly about the issues facing Tunisia.

Meloni indicated that she planned to return to Tuns in the near term with a delegation of European leaders to continue discussing Tunisia’s financial situation and the issue of irregular migration.

Outlook:  

Italy’s push for an economic solution in Tunisia seems to be reaching a pique following the recent G7 meetings in Japan. Meloni’s visit to Tunis and plans to visit again shortly show the extent to which the issue is being prioritized by Rome.

Rome’s promise of more than $700 million in aid is likely a form of putting pressure on both Europe and the IMF to press forward with a deal. While Italy’s bailout has been framed as “assistance” toward finalizing the IMF deal, it could ultimately be viewed as counterproductive to the IMF deal. A unilateral Italian financial bailout functionally rewards the Tunisian government’s backpedaling on the previously agreed-upon deal and could reinforce assumptions in Carthage that, if Tunisia holds out long enough, Europe will come to its rescue.

With domestic pressure growing in Italy and across Europe regarding the influx of migrants, Tunisia’s bargaining position has continued to increase, making it less likely that Carthage consents to austerity measures previously agreed-upon with the IMF.

In the short-term, we see the cumulative effects of economic strain growing, particularly in Tunisia’s more marginalized areas. However, significant risks of unrest or destabilizing activities have yet to emerge as many appear content to wait and see what results President Saied and his administration can produce.

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