Tunisia parliament backs Chahed’s new government

TUNIS (Reuters) – Tunisia’s parliament gave Prime Minister Youssef Chahed’s new government a vote of confidence on Monday after the premier detailed plans to halve the budget deficit and trim the public wage bill in the next three years as part of a reform package.

Chahed last week named a new cabinet after weeks of wrangling between the ruling Nidaa Tounes party and rival Islamist party Ennahda over posts that had delayed progress on a reform program backed by the International Monetary Fund.

Lawmakers voted late on Monday to approve the new cabinet, giving Chahed support to push on with austerity measures.

“We hope this will be the government that gives Tunisians back some hope,” parliament assembly President Mohamed Naceur said after the vote.

Tunisia has been praised for its democratic progress after the 2011 uprising against autocrat Zine El-Abidine Ben Ali, but successive governments have failed to advance in economic reforms to trim deficits and create jobs and growth.

Chahed earlier said his government needed consensus backing to push ahead with reforms by 2020 that he hopes will revive Tunisia’s economy, which has been hit by unrest after the 2011 revolt and by militant attacks on the tourism industry.

“We are preparing an economic plan to relaunch and salvage the Tunisian economy,” he told parliament five days after naming a cabinet that includes a new minister in charge of economic reforms. “This is needed to balance our finances.”

Chahed said the government aimed to reduce the deficit to 3 percent of gross domestic product by 2020 from 6 percent expected this year. He said growth was expected to hit 5 percent that year; in the first half of this year, the economy expanded by 1.9 percent.

Backed by the International Monetary Fund, the North African country is looking to reduce subsidies, overhaul its pension system and shrink its large public sector. But worries over social unrest have kept authorities from advancing with reforms.

Chahed said the government planned to reduce the public wage bill to around 12.5 percent of GDP from the current 14 percent – one of the highest ratios in the world.

In an effort to boost foreign currency reserves, he said the government would also loosen currency controls to allow Tunisians to hold foreign currency accounts locally and introduce an amnesty for illicit foreign currency trade.


Reporting by Tarek Amara; Writing by Patrick Markey; Editing by Mark Trevelyan and Leslie Adler