European Economic Crisis: What are the challenges for Tunisia?

Maghreb countries warn against rising inflation due to the decline in the Human Development Index in 2022 and 2023, especially after difficult times, and expect the evolution of economic indicators and forecasts for the European continent, especially within the European Union. doing. In connection with the COVID-19 pandemic, then a serious energy crisis and rising oil and gas prices.

Accelerating concerns about indicators of the European economy are the entry into the inflamed Russian-Ukraine conflict circle and the great losses in some sectors. Therefore, if the war is prolonged, or if Russia relies on the use of natural gas weapons in the current war and locks it up from a highly dependent continent, development can be adversely affected because of Russia’s Gas covers 40% of Europe’s consumption.

In this regard, the Maghreb countries, especially Algeria, Morocco and Tunisia, have begun to recalculate and prepare for the future impact of the European economy.

Trade with Europe accounts for more than half of the trade between the Maghreb countries and the rest of the world. Also, the economies of the Maghreb countries are heavily dependent on financial relocation from immigrants to the Old World.

Algeria is closely associated with the evolution of European economic indicators, as the European Union is considered to be Algeria’s major trading partner and the largest investor in Algeria, especially in the areas of oil, utilities and services. It is believed to be the first country involved. It was added as the first source of foreign currency, thanks to remittances from Algerian immigrants.

Trade between Algeria and the European Union countries reached $ 22 billion in the previous year. This is 51.75% of Algeria’s total trade, but 90% of its trade is Algeria’s oil exports.

Morocco, meanwhile, is monitoring the economic performance of European Union countries, which import most of their local products, to support the development of kingdoms with delayed rainfall during the month. It is important for its growth.

Morocco especially expects foreign demand from Europe. According to official data, exports in the previous year increased by 24.3% in parallel with a 25% increase in imports.

The government predicts that global demand for Morocco will continue to improve, foreign direct investment will strengthen, and remittances from the Moroccan community, which reached unprecedented levels last year, will continue.

From another perspective, Tunisia’s efforts to get out of the recession and restore production power are the development of the European Union, the country’s first traditional economic partner, which accounts for more than 70% of Tunisia’s exports. Consistent with the slowdown and high inflation. ..

According to the latest data from the National Institute of Statistics, the strength of economic transactions between Tunisia is concentrated in France, Germany and Italy, where Tunisia’s exports are increasing.

The International Monetary Fund recently announced that it would reduce its development forecast in Europe to 3.9% in 2022 and slow it to 2.5% in 2023. This is due to unprecedented inflation and increased debt, as well as possible fluctuations in demand in the Old World.

The cultural and commercial relationship between Tunisia and the countries of the European Union is considered one of the oldest. This is due to the geographical and historical factors that connect the two parties. Therefore, the first trade agreement between Tunisia and the European Economic Community dates back to 1969 and signed a cooperation agreement in 1976.

The impact of the decline in European Union development on Tunisia seems low given that it suffers from structural problems primarily related to internal crises that are negatively impacting Tunisia’s investment flows. Universal.

According to official data on trade transactions with the European region, exports to European countries are increasing and are not affected by the decline in demand in the region.

Tunisia’s exports to these major customers, France, Germany and Italy, will remain at normal levels, especially as most of these exports are made up of food and textiles, which are constantly moving. It is expected that.

Tunisia is working to restore the market to European tourists with the promise of a major tour operator that French and German tourists will return to their hotels in Tunisia this summer. Two countries.

In the last quarter of 2021, Tunisia’s exports to the European Union (70.2% of total exports) experienced a positive development of 13.9%. Exports to certain European partners increased, including 10.7% for France, 31.4% for Italy and 24.9% for Germany. Meanwhile, Tunisia’s exports fell 16.4% along with other European countries such as Spain, while Greece fell 5.6%.

Tunisia was the first country on the southern coast of the Mediterranean to enter into a partnership agreement with the European Union in July 1995 and entered into force in 1998. Tunisia is trying to break its economic reliance on the European Union, but its ties to these markets shift the weight of exports to new markets, especially Arabs and Africa, which offer great opportunities for exporters. It hinders attempts to do so.

What’s happening in Tunisia?
I will explain on the YouTube channel. Subscribe!