“It’s crazy. I don’t know how we’re going to do it. Do you realize? Spain is Algeria’s fourth client and its fourth seller.” The one who expresses himself in this way, dismayed and with a broken voice, is a commercial intermediary based in Algiers quoted by the French newspaper Le Figaro who is still trying to assimilate the sudden decision of the Algerian president to suspend the Treaty of Friendship, Good Neighborhood and Cooperation signed two decades ago with Spain after Madrid aligned itself with Morocco’s position in Western Sahara.
In just a few hours a wind of panic has hit the business sector, the most affected by the immediate consequences of a measure that involves the freezing of commercial transactions of products and services. “Cardboard, ceramics, iron coils, wood for construction… Importers are crying,” says an Algerian businessman who wonders if gas will also be affected.
Until last year, Algeria was the main supplier of natural gas to Spain, leadership assumed by the United States in the first four months of 2022, with 30% of the total, ahead of the Maghreb country, with 23 percent. Algeria warned in early April that Spain is the only country to which it intends to review the sale price of gas once the contracts have to be renewed, which raises uncertainty about the profitability of imports. Spain is connected by two gas pipelines with Algeria, although the one that passes through Morocco has been cut off since August 2021 due to the fact that the two Maghreb countries have broken diplomatic relations.
The Spanish-Algerian treaty sought to strengthen the political dialogue between the two countries, at all levels, and the development of cooperation in the economic, financial, educational and defense fields. In addition, a key banking body in the country ordered its banks and financial entities “to freeze direct debits for foreign trade operations of products and services to and from Spain as of Thursday, June 9.” Ally of the Saharawi independence movement Polisario Front, Algeria considers Madrid’s new position as a “violation of its legal, moral and political obligations” with this territory, a Spanish colony until 1976.
“The Algerians have always said that they would respect, at least until they come into force, the contracts made in the matter of hydrocarbons, and so far they have kept their word. Sonatrach (Algerian public hydrocarbons giant) even committed in April to a research and exploitation with Repsol”, a Spanish economic actor in Algiers assures the French newspaper, who trusts that the Algerian authorities “do not dare to deprive” his former gas partner and who regrets that the Spanish leaders “understand so little the Algerian mentality “.
“We wonder how far the crisis will go. The Algerians dropped a bomb but, specifically, we don’t know what awaits us. Spain could also denounce this break in trade relations, which is a violation of the association agreement between Algeria and the European Union” , stresses an Algerian importer.
The Minister of Foreign Affairs, European Union and Cooperation, José Manuel Albares, will travel to Brussels this Friday to meet with the Vice President of the Commission responsible for EU trade policy, Valdis Dombrovskis, according to diplomatic sources. minister comes after Algeria’s decision to suspend foreign trade operations with Spain in response to the “unjustifiable” shift of the Government with respect to Western Sahara, after supporting the autonomy plan for the Sahara.
Albares has indicated that he is “exactly analyzing the implications of this measure, the practical scope, both at a national and European level”, in reference to the Agreement between the EU and Algeria. Once this analysis has been completed, the minister, the Government will be able to “give the right answer”. A response, said the Foreign Minister, which will be “serene and constructive but also firm in defending the interests of Spain and Spanish companies”.
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