European Union ministers have held out the prospect of more development lending for north African and Mediterranean states but urged them to trade more with each other to close a wealth gap stirring northward migration.
"It's not the intervention of loans and financing that will help us much, but the fact that countries open up to exchanges and international trade," Belgian Finance Minister Didier Reynders told Reuters. He was speaking at the two-day Euro-Med ECOFIN ministerial meeting in Tunis which began on Sunday.
Europe's southern neighbours achieved economic growth of 4.8 percent last year, lagging the 7.2 percent expansion rate of emerging markets and developing countries as a whole.
The EU has spent billions in loans and aid to nudge its southern neighbours to improve their investment climate, governance and infrastructure under the Euro-Mediterranean partnership, also known as the Barcelona Process.
And many barriers to trade across the Mediterranean are falling with moves to free up trade in services and agricultural products. But commerce among Arab countries remains light because of high import tariffs, inefficient infrastructure and awkward political relations.
Foreign direct investment is languishing at the bottom of the world league, with FDI into the region representing 3 percent of the global total. And economies are struggling to create enough jobs to avoid mass unemployment, prompting thousands of illegal immigrants to brave the perilous journey to Europe's southern coasts in Spain, Malta or Italy. Only 16 out of 35 economy and finance ministers turned up at the meeting in Tunis.
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