VZCZCXYZ0006
PP RUEHWEB

DE RUEHTU #1816/01 1990949
ZNR UUUUU ZZH
P 180949Z JUL 06
FM AMEMBASSY TUNIS
TO RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEHC/SECSTATE WASHDC PRIORITY 1312

UNCLAS TUNIS 001816 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE PASS TO USTR (BELL) 
STATE FOR NEA/MAG (HARRIS), EB/IFD/OIA (TRACTON), EB/TPP, 
EUR/ERA 
USDOC FOR ITA/MAC/ONE (ROTH) 
 
E.O. 12958: N/A 
TAGS: ECON EFIN ETRD EU TS
SUBJECT: EUROMED ECONFIN MINISTERIAL CONFERENCE JUNE 25-26, 
2006 
 
REF: TUNIS 1599 
 
¶1. (SBU) Summary and Comment: On June 25-26, 2006, economic 
and finance ministers (ECOFIN) of the 35 countries of the 
Euromed zone met in Gammarth, Tunisia to discuss the future 
of the European Investment Bank's (EIB) Facility for 
Euro-Mediterranean Investment and Partnership (FEMIP) and the 
possibility of creating a new regional development bank. 
While Tunisia and many southern Mediterranean countries 
support the idea of a regional development bank, that was 
only one of several scenarios the conference considered, and 
it is unlikely to materialize anytime soon, notwithstanding 
their support for the idea.  Demonstrating the importance the 
GOT attaches to this issue, Minister of Development and 
International Cooperation (MDIC) Jouini postponed the 
scheduled June 30th Trade and Investment Framework Agreement 
(TIFA) Council Prepcom with AUSTR Donnelly so he could attend 
the conference. End summary and comment. 
 
----------------------------- 
EUROMED CONFERENCE HIGHLIGHTS 
----------------------------- 
 
¶2. (U) On June 25-26, a joint meeting of the sixth 
Euro-Mediterranean Ministerial Committee and the second 
Economic and Finance Ministers (ECOFIN) Council took place in 
Gammarth, Tunisia.  Its purpose was to discuss the future of 
the European Investment Bank's Facility for 
Euro-Mediterranean Investment and Partnership (FEMIP). 
(Note: The FEMIP Mediterranean partner countries include 
Morocco, Algeria, Tunisia, Egypt, Gaza/West Bank, Israel, 
Lebanon, Jordan, Syria, and Turkey. End note.)  The current 
mandate of the partnership expires at the end of 2006. 
 
¶3. (U) In his opening statement, European Commissioner for 
Economic and Monetary Affairs Almunia spoke of the problems 
of low per capita growth and high unemployment, especially 
among the young, that exist on the Mediterranean's northern 
and southern shores and emphasized the need to pursue reforms 
to lift obstacles to investment, innovation, and sustainable 
growth.  The commissioner also pointed to GDP growth in the 
region, which averaged 4.8% in 2005.  In his opinion, the 
development of the private sector is the only way to help 
address the economic concerns of the region. 
 
¶4. (U) According to news reports, several EUROMED countries 
agreed on how to enhance regional economic strength.  The 
main issues discussed were improving the business climate for 
private sector development, further liberalizing trade and 
opening up the economy, upgrading public institutions and 
economic governance, and securing macroeconomic stability. 
The Ministerial Committee also reportedly suggested ways to 
develop the energy markets in the region, particularly the 
natural gas sector, and to maintain FEMIP's investment in 
support of renewable energy. 
 
¶5. (U) The members did not agree on how to reorganize FEMIP. 
According to the French Embassy's 'Tunisian economic and 
financial news' country review, the conference envisioned 
three potential scenarios: a) renew FEMIP in its current form 
and keep the status quo; b) create a Euro-Mediterranean 
Regional Development Bank to gain greater visibility in the 
Euromed region; c) create a steering committee that would 
manage FEMIP-related activities and loan programs of the EIB. 
 
¶6. (U) The Ministerial Committee's next meeting will take 
place in Cyprus in May 2007.  In the months before the next 
meeting, FEMIP will hold two forums: one on the development 
of trans-Euro-Mediterranean transport networks during the 
final quarter of 2006 and one on remittances by Mediterranean 
migrants during the first quarter of 2007. 
 
----------------------------------- 
COUNTRY POSITIONS ON REGIONAL BANK 
----------------------------------- 
 
¶7. (SBU) Tunisia, like many other southern Mediterranean 
states, has long seen the establishment of a 
Euro-Mediterranean Development Bank as a way of promoting 
growth.  In a statement quoted in the press, Tunisian 
Development Minister Mohamed Nouri Jouini said the creation 
of a bank would be beneficial because it could grant loans at 
lower interest rates.  Separately, in conversations with 
econoff, Tunisian MDIC officials said that they wanted to see 
the creation of a regional bank because they believed EIB 
 
funds were being diverted away from FEMIP to new EU member 
countries from eastern Europe.  One MDIC official made clear 
that the GOT was disappointed that the regional bank was not 
created. 
 
¶8. (SBU) Comment: Demonstrating the importance the GOT 
attaches to this issue, Jouini postponed the scheduled June 
30th Trade and Investment Framework Agreement (TIFA) Council 
Prepcom with AUSTR Donnelly (reftel) and did not attend the 
June 26-28 U.S.-Arab Economic Forum in Houston, TX.  The 
Tunisian-American Chamber of Commerce (TACC) also cancelled 
its congressional trade promotion visit (scheduled for June 
26 -30) to Washington because Jouini could not attend.  End 
comment. 
 
¶9. (U) According to the media, Morocco turned out to be the 
staunchest defender of the proposed bank, while Egypt 
proposed that such a bank only be set up in the long term. 
Media reports speculated that some southern Mediterranean 
countries worried that a Euromed bank would lead to political 
rivalries between countries over loan applications.  Many 
countries also reportedly prefer to pursue bilateral 
arrangements. 
HUDSON