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TEXT-Fitch: assassination a setback to Tunisia transition
February 7, 2013 / 4:41 PM / in 5 years

TEXT-Fitch: assassination a setback to Tunisia transition

Feb 7 - The assassination of Tunisian politician Chokri Belaid and the
announcement of the dissolution of the Tunisian government increase the
uncertainty about the country's political transition, Fitch Ratings says. The
risk that divisions among the population and politicians will result in
intensifying social and political violence has risen.

We downgraded Tunisia to 'BB+' with a Negative Outlook in December to reflect
the longer-than-expected transition period, characterised by weak economic
performance and prolonged political uncertainty. The rating already incorporates
the risk of heightened political trouble. However, the recent announcement by
the IMF that negotiations with the Tunisian authorities for a precautionary
stand-by agreement to support the country's reform programme were advanced, is
supportive of the rating.

Our base case in December envisaged elections in 2013 leading to the formation
of a stable government and to the gradual decline of social and political
tensions. As we said, the intensification and spread of social violence,
generating political destabilisation and jeopardising the transition, would be a
potential ratings trigger. If the likelihood of this increases, with the
inability to form a new government and/or a destabilised government, Fitch could
downgrade Tunisia's ratings again.

The assassination of Chokri Belaid, the leader of a left-wing secular opposition
party, on Wednesday prompted protests in some large Tunisian cities, clashes
between protesters and the police, and the deployment of the army. Opposition
parties announced they would stop sitting at the National Constituency Assembly
(NCA), which is in charge of drafting the long-awaited new constitution of the
country, and a general strike will be organised on Friday.

The assassination occurred after several weeks of increasing tensions within the
coalition government, as Prime Minister Hamdi Jebali of Ennahda, the largest
party in the coalition, attempted a reshuffle. Social tension remained
significant in the country, fuelled both by deteriorated economic prospects and
by Salafi movements, which were blamed for several violent actions in 2012. The
rising influence and violence of extremist movements in recent months have
exacerbated divisions between the secularist opposition parties and the Islamist

Prime Minister Jebali announced on Wednesday that the government would be
dissolved and replaced by an apolitical government of technocrats in charge of
day-to-day management until elections could be held in the shortest time

However, dates for the designation of this new government and for the elections
have yet to be announced. On Thursday, influential Ennahda leaders publicly
contradicted Jebali's announcement, raising uncertainty over any transfer of
power. A split of Ennahda would fuel the political crisis even more.

The above article originally appeared as a post on the Fitch Wire credit market
commentary page. The original article can be accessed at
All opinions expressed are those of Fitch Ratings.

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