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It will cost, but the EU needs a Marshall Plan for Tunisia

After the Second World War, the Americans launched the Marshall Plan to rebuild Europe. It helped turn Europe into an economic powerhouse and lift entire nations out of poverty. It gave the United States and Canada, which was part of the effort, a loyal and stable transatlantic trading partner.

The European Union should take note. North Africa needs help. Libya is turning to rubble as the rebels, with NATO's help, try to depose Moammar Gadhafi. Egypt's revolution is, at best, half done. Tunisia, having sent long-time dictator Zine el-Abidine Ben Ali into exile, is farther along and is to hold free elections on July 24. Still, it's too early to say that Tunisia will become a truly democratic, open-market economy.

The EU does not have a good record in nation-building abroad or in its own neighbourhood. The EU countries that sent troops into the Afghanistan quagmire no doubt regret doing so. The belated response to the Kosovo war in the late 1990s was not the EU's finest hour. Standing by while vast parts of North Africa struggle for a new start after decades of brutal dictatorships and epic theft by the political elites risks handing the EU a Mediterranean frontier cluttered with failing states.

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Tunisia is the obvious place to lend a helping hand. The EU is not a global economic or military power - it is struggling to muster enough fighter-bombers to keep the air war going over Libya - and can't manage anything ambitious. Egypt is too big a project for the EU. The Libyan war could grind on for many more months as Col. Gadhafi digs in. Better to help a small country and do it well.

Tunisia has been part of the European economic reality since ancient times, when the country emerged as Rome's granary. In the last century, it was a French colony, until independence in 1956, and maintains close ties to France. While its official language is Arabic, most Tunisians speak French well and some speak Italian. Palermo, the Sicilian capital, is closer to the Tunisian capital, Tunis, than Paris is to London.

While Mr. Ben Ali and his family did an expert job in looting the country, they knew what was good for them (at least for a while, before out-of-control greed set in) and allowed Tunisians to build a fairly diversified economy with strong links to the EU. Its economy has expanded consistently for the past 20 years, giving it one of the Middle East's and Africa's highest gross domestic products, measured per capita.

Agriculture is a big business in Tunisia. The country produces oil, though not nearly as much as Libya or Algeria. Its light manufacturing industries make shoes, clothing and auto parts. Global companies, including Airbus and Hewlett-Packard, set up operations in Tunisia, where they tapped into a educated, multilingual and inexpensive work force. More than two-thirds of Tunisia's exports go to Europe.

But Mr. Ben Ali also ran a nasty bureaucracy that stifled business innovation and frustrated small businesses. The result was high unemployment, especially among the young, and a sense among the business class that the state would go out of its way to milk entrepreneurs dry.

It is worth remembering that the Arab uprising began on Dec. 17, when a Tunisian fruit vendor, Mohamed Bouazizi, set himself on fire near a government building. He had decided that his life was not made impossible by lack of political freedom, but by lack of economic freedom. Police and municipal government thugs were always shaking him down for payoffs. Protests began within hours of his self-immolation and the Arab spring was born.

What can the EU do to help Tunisia? The country does not need military boots on the ground - there is no civil war. What it does need is help in building a democratic market economy, one where the wealth is not just concentrated among senior government officials and their friends. The EU could advise the new Tunisian government on the dangers of monopolies and overregulation, and the benefits of competition. Tunisia needs an economic revolution as well as political one. The heavy hand of the state on every aspect of the economy has to go if Tunisia is to create jobs.

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Of course, the EU would have to open up is wallet to spend on Tunisia infrastructure and perhaps security - a mini Marshall Plan. It might have to give incentives to EU companies to invest in Tunisia.

The payoff would be worth it. The EU needs a stable and economically vibrant Tunisia, one that can be an inspiration to the rest of the Arab world. It needs to find a way to stem the flow of illegal Tunisian migrants to the EU, and there is no better way of doing that than to create jobs in Tunisia. The EU also needs to show the world that it can take care of its own backyard. The United States has made it clear that North Africa is not its problem to fix.

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About the Author
European Columnist

Eric Reguly is the European columnist for The Globe and Mail and is based in Rome. Since 2007, when he moved to Europe, he has primarily covered economic and financial stories, ranging from the euro zone crisis and the bank bailouts to the rise and fall of Russia's oligarchs and the merger of Fiat and Chrysler. More

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