US to guarantee loans to help Tunisian transition

The United States will provide as much as “several hundred million dollars” of loan guarantees to support Tunisia’s democratic transition and economic recovery, the U.S. Treasury Department said on Friday. “Last October, President (Barack) Obama made clear the United States’ commitment to supporting Tunisia’s historic transformation,” U.S. Treasury Secretary Timothy Geithner said in a statement after signing a declaration of intent with Tunisian Finance Minister Houcine Dimassi. “This loan guarantee will be a pillar of that support, helping Tunisia achieve key development goals and advancing its economic transition,” Geithner said. The program comes more than a year after street protests that drove longtime Tunisian President Zine al-Abidine Ben Ali from power in January 2011 and inspired a wave of similar uprisings across North Africa and the Middle East. The two countries hope to quickly wrap up negotiations so Tunisia can use the loan guarantees before the end of June, the Treasury Department said. The US Congress has appropriated $30 million to cover the subsidy cost of a sovereign loan program for Tunisia. A Tunisian finance ministry official, Chaker Soltani, told reporters in March the U.S. loan guarantee would allow Tunisia to tap international bond markets for the first time since 2007. He estimated the U.S.-guaranteed bond could raise $400 million to $500 million at far lower rates than the country’s risk profile would normally allow. The US Treasury Department said the loan guarantee would allow Tunisia to raise “several hundred million dollars on international bond markets,” depending on the terms negotiated between the two countries in coming weeks. The program is in addition to a $100 million cash transfer the United States has provided Tunisia, the department said.