By Gabriela Baczynska and John Irish
BRUSSELS/PARIS (Reuters) - Italy offered Tunisia a prospect of money in exchange for economic and political reforms as European Union foreign ministers discussed on Monday how to respond to growing instability in a country that is a gateway for African migration to Europe.
With the number of people crossing the Mediterranean in smugglers' boats on the rise, Italy's conservative government has urged Brussels to do more to reduce irregular arrivals.
"Tunisia is a key country for stability in the Mediterranean Sea and in North Africa," Italian Foreign Minister Antonio Tajani said on arriving for EU talks in Luxembourg.
He said he hoped for an agreement between Tunis and the International Monetary Fund as well as more EU investment.
But EU countries are wary of supporting President Kais Saied, who has shut down Tunisia's parliament, rammed through a new constitution giving him sweeping executive power, and cracked down on political opponents as well as African migrants.
Saied this month rejected the terms of a $1.9 billion IMF bailout, without which Tunisia may default on its foreign debt. The terms include cuts to food and energy subsidies and a reduction in the public wage bill.
"Of course we need reforms in Tunisia," said Tajani. "We need to start with financing, then we need to wait for the reforms, and then after that we have to move forward with (more) financing."
The EU border agency Frontex named political volatility in Tunisia as one of the reasons why first-quarter arrivals by sea in Italy and Malta from Tunisia and Libya tripled from a year earlier to over 27,500.
Saied's crackdown on migrants from further south has triggered a perilous rush to leave on smugglers' boats. Economic woes have also pushed more Tunisians to try to emigrate.
Last week, opposition leader Rached Ghannouchi was arrested and charged with plotting against state security.
No decisions were expected from the ministers on Monday. A senior diplomat involved in preparing the meeting, who declined to be named, said Tunisia presented a conundrum:
"You don't want this country to collapse - that would have multiple negative consequences, including on migration. We need to find some way to help them.
"At the same time, we can't ignore democracy, human rights and the rule of law. Because that would eventually destabilise the country so you'd be getting the same result you are trying to avoid."
The EU's top migration official will visit Tunisia later this week, together with French and Italian ministers, while the Belgian and Portuguese ministers will follow on May 9-11.