Auditors criticise ‘lax’ EU aid to Tunisia

European Union aid for Tunisia was overambitious and too lax, according to the European Court of Auditors.

 Auditors examined €1.3bn in financial assistance provided to Tunisia in the wake of the 2011 Arab Spring until 2015, a time in Tunisia characterised by political and economic instability, social unrest and terror attacks and an overall bumpy transition to democracy.“Security has become an important challenge for the country,” noted Karel Pinxten, the member of the ECA responsible for the report. “Against such a background, the effective management of EU financial support is paramount.”

However auditors concluded that the EU’s ability to manage the funds was hampered by its attempts to tackle too many areas at once, which also resulted in the money being too thinly spread.

They concluded that while funds were “generally well spent”, EU attempts to tackle too many areas at once gave rise to management difficulties and meant the money was too thinly spread.

At the same time, the conditions tied to the money – provided directly into the Tunisian government’s budget – were too flexible, reducing the incentives for Tunisia to take the measures specified in its agreements with the EU.

For instance, commission guidelines for budget support state that a Public Expenditure and Financial Accountability (PEFA) assessment should be taken out every four years. PEFA assessments are renowned for providing rigorous evaluation of overall public financial management.

The last PEFA assessment in Tunisia took place in 2010. Auditors said this was unacceptable as the assessment was needed to provide assurance on PFM and identify weaknesses that needed to be urgently addressed, especially in light of the significant amounts of budget support being delivered.

Meanwhile, Tunisia was implementing reforms sluggishly. PFM was one area where the pace of change was particularly slow, auditors noted, with a budget law, overhaul of procurement procedures and improvements to transparency, accountability and effectiveness of audits still needed.

In their report, auditors noted that this was mainly due to factors relating to numerous changes of government and lack of an overall development plan, which nevertheless “considerably complicated” the proper targeting of EU aid.

Tunisia’s ‘Jasmine revolution’ in 2011 kicked off a wave of uprisings across the Arab world. With countries like Syria, Yemen and Libya since falling into chaos, Tunisia’s emergence from the Arab Spring has been relatively successful.

However, the years since 2011 have been turbulent. The economy flagged – a situation exacerbated by a series of terrorist attacks, denting much-needed tourism revenues – unemployment soared, and discontent continued as successive governments failed to fulfil the promises of the revolution.

The International Monetary Fund, which has an aid programme with Tunisia worth $2.9bn, expects things could be about to improve. It predicts growth will jump by more than 1% this year, to 2.5%.

However it warned that public debt is still growing, reaching 60% of GDP last year, and that “urgent action” is needed to shore up the public finances.

Public Finance International


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