Econostrum | Economic News in the Mediterranean

Algiers castigates EU intervention in its bilateral dispute with Spain

Written by Frédéric Dubessy on Tuesday, June 14th 2022 à 15:10 | Read 191 times

ALGERIA / SPAIN. The announcement by Algiers, Wednesday 8 June 2022, of the "immediate suspension" of a treaty of friendship, good neighbourliness and cooperation dating back twenty years with Madrid, accompanied by a boycott of Iberian products and the freezing of financial transactions between the two countries, has caused the European Union (EU) to react.

Josep Borrel, Vice-President of the European Commission and High Representative, and Valdis Dombrovskis, Executive Vice-President, issued a joint statement on Friday 10 June 2022, calling the decision "extremely worrying". "We are currently assessing the impact of the Algerian measures, including the instruction given to financial institutions to suspend transactions between the two countries, which appears to violate the EU-Algeria Association Agreement from the outset, particularly in the area of trade and investment. This would result in discriminatory treatment of an EU Member State, which would undermine the exercise of the Union's rights under the agreement," the text says.

As part of the Barcelona Process, an association agreement between Algeria and the EU was initialled on 22 April 2002. It came into force on 1 September 2005 and provides for the gradual elimination of import duties on industrial products from the EU and agricultural products from both countries. This text was completed by a Euro-Mediterranean Association Agreement with the European Community signed in August 2016.

The EU is ready to oppose "any coercive measure"

The falling out arose from the rapprochement between Spain and Morocco (after a year-long diplomatic crisis following the reception of Brahim Ghali, leader of the Polisario Front, by a Spanish hospital), the entry point of which was Madrid's diplomatic U-turn on the sensitive issue of Western Sahara. For the same reasons, Algiers already broke off all diplomatic relations with Rabat in August 2021. The Spanish support for Morocco has thus provoked a unilateral ricochet break with Madrid.

"We will firmly defend our companies and the interests of Spain, which are also EU companies and which carry the interests of the EU", declared José Manuel Albares, Spanish Minister of Foreign Affairs, on Friday 10 June 2022 from Brussels. "If the resolution of the dispute is in the hands of the Commission, Spain's wish is that it be resolved as quickly as possible through dialogue and normal diplomatic channels," he continued.

The EU states that it is "ready to oppose any type of coercive measures against any of its Member States". While adding, "Algeria is an important partner of the EU in the Mediterranean and a key player for regional stability. We trust that in the name of our strong and lasting partnership, a rapid solution will be found to fully restore trade and investment relations".

While indicating that they are "in close contact with the Spanish government", the two representatives of the European Commission affirm that they are "reaching out to the Algerian authorities to clarify the situation rapidly".

A bilateral political disagreement

In reaction, on Saturday 11 June 2022, the Algerian Ministry of Foreign Affairs denounced "the haste and bias of these statements (editor's note: of the European Commission). According to this text, 'They highlight the inappropriate nature of their content, as they concern a political disagreement with a European country of a bilateral nature that has no impact on Algeria's commitments to the European Union and consequently do not require any European consultation for the purposes of a collective reaction'.

The Algerian mission in Brussels added that "as regards gas deliveries to Spain, Algeria has already made it known through the most authoritative voice, that of the President of the Republic, that it will continue to honour all its commitments in this context, with the commercial companies concerned being responsible for fulfilling all their contractual commitments". The Algerian representation in Brussels described as "fanciful and malicious the insinuations and questions relating to the question of gas supplies to Spain".

The end of the treaty does not mean a hydrocarbon war. Nor does the cessation of payments to and from Spain which, while it affects all commercial exchanges, does not apply to the supply of gas, as Algiers has specified. "Moreover, this question, which concerns the companies of the two countries on a strictly commercial basis, does not arise in the context of energy relations with the other purchasers of Algerian gas in the Euro-Mediterranean area, who fulfil their contractual obligations with the same good faith as Algeria," the Algerian communiqué said.

Algeria is Spain's second largest supplier of gas (after the United States). According to Nadia Calvino, Spanish Minister of Economy, who spoke on Monday 13 June 2022, deliveries have not been affected. She said she was convinced that there would be no disruption.

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