U.S. Treasury Secretary Tim Geithner and Tunisian Finance Minister Houcine Dimassi today signed a declaration of intent to move forward on a U.S. loan guarantee for Tunisia as quickly as possible.
The U.S. government would provide this loan guarantee to enable the Tunisian government to access significant market financing at affordable rates and favorable maturities with the backing of a U.S. guarantee of principal and interest (up to 100 percent). The ceremony took place at the World Bank immediately following the meeting of Finance Ministers of the Deauville Partnership with Arab Countries in Transition.
"I'm pleased to sign this declaration of intent with Finance Minister Dimassi," said Secretary Geithner. "Last October, President Obama made clear the United States' commitment to supporting Tunisia's historic transformation. This loan guarantee will be a pillar of that support, helping Tunisia achieve key development goals and advancing its economic transition."
The support would consist of the U.S. guarantee of Tunisian government-issued debt (or of bank loans made to the Government of Tunisia). This guarantee will significantly reduce the Tunisian government's borrowing costs at a time when market access has become more expensive for many emerging market countries. In the weeks ahead, both governments intend to make progress on a loan guarantee agreement that would allow Tunisia to move forward with a debt issuance.