BY: Hana Saada
ALGIERS- The ongoing crisis between Algeria and Spain has taken a toll on Spanish companies, leading to economic difficulties and political consequences. In an effort to address the situation and support affected businesses, the Spanish government, led by Pedro Sanchez, has announced a financial aid package of 200,000 Euros. This aid aims to alleviate the hardships faced by Spanish companies as a result of the economic sanctions imposed by Algeria.
The economic sanctions imposed by Algeria on Madrid have not only affected businesses but have also fueled the discontent of Spanish businessmen. This discontent has translated into political consequences, with the ruling Socialist Party losing recent local and regional elections in favor of the rival Popular Party. The upcoming legislative elections in July further threaten the ruling party’s hold on power, prompting the government to take swift action.
The financial aid of 200,000 Euros, to be distributed once every three years, comes with a deadline of July 23, coinciding with the pre-legislative elections. The decision to provide this aid was made in agreement between the Spanish government and Brussels, demonstrating the joint effort to address the challenges faced by Spanish companies and maintain competitiveness within the European Union.
The deterioration of Algerian-Spanish relations began in March 2022, following a shift in the Spanish government’s position on the Sahrawi issue. This change involved abandoning the country’s neutral stance and supporting the Moroccan regime’s “autonomy plan.” Algeria considered this shift an “unfriendly position” and suspended the Treaty of Friendship, Cooperation, and Good Neighborliness signed between the two countries in 2002.
The impact of the crisis on commercial transactions between Algeria and Spain has been significant. Spanish exports to Algeria decreased by 55.9 percent in 2022 compared to the previous year, equivalent to a loss of around 867 million Euros. The decline continued in 2023, with exports plummeting over 93 percent in the first three months of the year compared to the same period in 2022. This steep decline has affected various export sectors, highlighting the severity of the situation.
Efforts to resolve the crisis between Algeria and Spain have so far been unsuccessful. While Spain has called upon the European Union to intervene and exert pressure on Algeria to restore normal trade relations, the Algerian authorities perceive the crisis as a bilateral issue. The preference for dialogue over pressure from the European side has not yielded positive results, further complicating the situation.
