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Tunisia Union Tanks IMF Loan Terms

FILE: Noureddine Taboubi (R), Secretary-General of the Tunisian General Labour Union (UGTT), chairs the meeting of the body's national administrative commission in Hammamet on May 23, 2022.

The head of Tunisia's powerful UGTT trade union confederation on Thursday rejected conditions set by the International Monetary Fund for a new loan to bail out the country's struggling economy.

UGTT Union Chief Noureddine Taboubi told reporters "We reject the conditions set by the IMF, given Tunisians' low salaries, lack of means, rising poverty and unemployment."

The global lender has called for "ambitious reforms" to tackle the heavily indebted country's public finances and reform its state-owned companies.

The IMF's regional chief Jihad Azour said Wednesday that the fund was set to begin formal talks on a new financial aid package "in the coming weeks", saying the economic fallout from the Ukraine war made it ever more pressing.

Azour had reiterated an IMF call for "swift implementation of ambitious reforms", saying Tunisia "needs to urgently tackle its fiscal imbalances" including by replacing generalised subsidies with transfers targeting the poor.

Azour visited Tunisia this week, meeting with President Kais Saied and other officials, and welcomed government plans to start tackling dire economic issues exacerbated by the war in Ukraine.

But on Thursday Taboubi, whose union members last week staged a crippling public sector strike, said the UGTT rejected "the painful options they're talking about".

"We support reforms, but we don't share the vision of reforms supported by this government," he said.

The IMF has previously conditioned any bailout deal on the union's consent.

The UGTT, a co-laureate of the Nobel Peace Prize for its efforts in a previous national dialogue following Tunisia's 2011 revolution, initially backed Saied's moves but has become increasingly critical as Saied extended his power grab.

On Thursday, Taboubi said: "When there is a government produced by institutions and elections, it will have the legitimacy to start negotiations over reforms."

The IMF has previously conditioned any bailout deal on the union's consent.