The spread of the Coronavirus and the resulting economic crisis marked the beginning of a new global crisis. The economy, nationally and internationally, was completely paralyzed. The issue of stimulus has become the first priority for each country. Nevertheless, and while the planet celebrated the return of trade and the lifting of the blockades, Russia decides to launch an offensive against Ukraine. This war had negative consequences for the market due to the important role of these two countries in the production of a large part of food products. Ukraine was unable to continue producing and exporting, and Russia dethroned Iran in the form of sanctions and embargoes. European countries that depend on Russian oil and gas have found themselves in a rather difficult situation. Due to these important facts, the leaders of various nations have emphasized the importance of implementing a series of reforms and adopting new approaches in terms of energy, but also economic models.
Americans were the first to try to preserve their economy by implementing several economic stimulus initiatives. The first took place before the invasion of Ukraine by the Russians. It was intended to limit the dependence of American companies on Chinese material manufacturers. A $1.9 trillion program was approved in March 2021. It aims to support Americans and communities. The program includes direct assistance in the form of checks, tax breaks, increased unemployment benefits, funds for jobseekers and increased reimbursements from the health system. The US administration had bet on the increase in consumption after the pandemic and a small economic boost to create jobs.
The United States continued to focus on the social and economic situation of its citizens by introducing another program called the “Health and Climate Plan. The plan was adopted last August and includes an envelope of up to 430 billion dollars. Several experts have dubbed It is the “inflation reduction plan”. It mainly aims to reduce greenhouse gas emissions in addition to lowering medicine prices. The US administration has allocated $370 billion to the climate issue, hoping to reduce greenhouse gas emissions by 40% by 2030. the law includes incentives and partial support for the installation of solar panels. These incentives concern companies but also consumers. The tax credit is granted in the case of the acquisition of an electric car.
The European Union, for its part, had adopted a recovery plan called “NextGenerationEU”. It has a budget equivalent to 806.9 billion euros. It supports the multiannual financial framework, which sets out the Union’s priorities for the period 2021-2027 with a budget of 1,210.9 billion euros. The two programs have as priorities the resilience of the economy, conservation of natural resources and innovation and the digital transition. In addition to this project, several countries belonging to the union have mobilized funds to create their own recovery plans.
The French recovery plan, for example, amounts to €100 billion, of which 39.4% comes from the European recovery plan. This program aims to restore the entire French economy and facilitate the transition to a sustainable economy, taking into account the ecological and environmental aspects. France has also prioritized social cohesion and competitiveness. The recovery plan includes measures enabling the provision of support to businesses, the preservation and creation of jobs, support for people in vulnerable situations, training of job seekers, reduction of taxes, strengthening of skills and research support.
In Germany, the German chancellor, Olaf Scholz, defends an energy plan of DKK 200 billion. He says the program aims to protect his country’s economy from the consequences of the energy crisis caused by the Russian invasion of Ukraine. Russia had been subject to several sanctions, which led to a significant decrease in the amount of natural gas transported to Europe and mainly to Germany. Olaf Scholz recalled that France or Spain had used mechanisms to limit the increase in energy costs for consumers. He found it legitimate to proceed in the same way and set a ceiling on prices. The plan announced in August aims to reduce energy bills for individuals but also for businesses to ensure their sustainability.
Other countries plan to focus efforts on preserving jobs and supporting companies to cope with the current economic crisis. Spain, Italy, Belgium and the Netherlands: all these countries have chosen a recovery plan that targets the same areas and seeks to preserve the national economy.
Tunisia has also announced through its President of the Republic Kaïs Saïed its intention to make major changes. Unfortunately, the priorities were not the same! The head of state has chosen to focus on purely political issues and to do away with certain individuals or parties to the detriment of the country’s economic situation. Kaïs Saïed justified his actions with the will of the people and the deterioration of purchasing power and public finances, and for more than a year, Kaïs Saïed began a pseudo-search for the liberation of the country and the preservation of its sovereignty. On several occasions he attacked Tunisia’s partners and the financial institutions that his government, chaired by Najla Bouden, continues to turn to for support and assistance. Moreover, the head of state does not seem to understand the importance of supporting Tunisian companies by all means in times of crisis in order to reduce the impact of the global situation on the Tunisian economy. He constantly raises the issue of monopolization and speculation and accuses entrepreneurs and businessmen of corruption and crimes against the Tunisian people.
While world powers and developed countries known for their liberal orientation seeks to provide support and assistance to companies and thus preserve jobs and the purchasing power of wage earners and consumers, the President of the Republic does not seem to be bothered by the reform program submitted to the International Monetary Fund based on the abolition. of support and compensation. Held by Bouden intends to cancel compensation to reduce government spending while the economy was completely paralyzed. The government has also chosen not to publish details of its reforms. Faced with the inflationary trend, the government contented itself with asserting its good intentions and postponing negotiations with the trade unions. He will eventually make a deal withUGTT on a ridiculous average increase of 3.5 in the salary of public servants! An average increase of 3.5% while inflation reached between September 2021 and September 2022 9.1% !
On his side, despite inflation at 10.1% for the entire European Union at the end of September and the fall of the euro against the dollar, the European Central Bank tried to keep its rates below 1%. Its main rates, namely the interest rate for the primary market operations, the marginal lending facility and the deposit facility are respectively of the order of approx. 1.25%, 1.50% and 0.75%.On the other hand, the Tunisian central bank announced in a press release dated October 5, 2022 the upward adjustment of the key interest rate. It raised the key interest rate by another 25 basis points 7.25%. The increase in the key interest rate leads to an increase in borrowing. The loan will therefore cost more for the consumer. Tunisians will have to face this new obstacle, inflation and scarcity.
Several experts have argued that the increase in the key interest rate, which leads to the increase in the cost of bank loans, will not change anything. Companies must spend more and therefore increase the selling price of their goods. Therefore, product prices cost more and we will end up in an endless inflationary trend. The head of state insists on several occasions on the concepts of dignity, sovereignty and food security, but does not seem to do anything to make this concrete. He also seems to know nothing about the policies of the Central Bank of Tunisia, his government and the latter’s true intentions!