Spain studies denouncing Algeria before the European Union

The Spanish government is studying denouncing Algeria before the European Union, according to government sources. The Ministry of Foreign Affairs believes that the unilateral freezing of trade with Spain may violate the 2005 Euro-Mediterranean Agreement, which established a preferential association regime between the European Community and Algeria.

The Minister of Foreign Affairs, José Manuel Albares, declared this Thursday that Spain is preparing an “adequate, serene and constructive, but firm, response in defense of Spanish interests and Spanish companies” to the Algerian decision. Last night, the Government received with surprise the news that the Association of Banks and Financial Entities (Abef) of Algeria had sent an instruction to the banks of its country informing them of the freezing of direct debits of foreign trade operations of goods or services directed or from Spain as of this Thursday, which in practice blocks bilateral trade. According to the head of Spanish diplomacy, the implications and practical scope of this decision at a national and European level are being analyzed.

Article 38 of Algeria’s agreement with the EU states that both parties “undertake to authorize, in freely convertible currencies, all current payments related to transactions” between the two and to guarantee the free movement of capital for direct investment in Algeria and the repatriation of profits, among other measures aimed at removing obstacles and discriminatory measures in trade between the Maghreb country and the European bloc.

The agreement also foresees that any conflict regarding the application or interpretation of the treaty will be submitted to an Association Council made up of the ministers of the EU and Algeria or, at a lower level, to an Association Committee made up of officials from both parties, whose agreement will be binding. In the event that it is not possible to reach an agreement, three arbitrators will be appointed to settle the dispute.

The EU’s Foreign and Security Policy spokeswoman, Nabila Masrrali, has called on Algeria to “reconsider its decision” to break off relations with Spain. “The suspension of the friendship treaty with Spain signed in 2002 is extremely worrying and we call on Algeria to reconsider its decision,” she said, without referring to the freezing of bilateral trade. The spokesman for the European Commission, Eric Mamer, has also urged Algeria to reverse a decision that he considers “extremely worrying”.

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According to data from the Secretary of State for Trade, Spain exported to the African country worth 1,242 million euros between January and August 2021, (1,916 in all of 2020), while it imported from said country for 2,556 million (2,511 the previous year ), mostly hydrocarbons. Spain is Algeria’s third largest customer (after Italy and France) and its fifth supplier (behind China, France, Italy and Germany).

The head of Spanish diplomacy has assured that, according to the information provided by the energy operators, this decision does not have to affect the flow of Algerian gas to Spain, which remains normal. The Minister for the Ecological Transition, Teresa Ribera, has also expressed her confidence that problems will not arise in the supply of Algerian gas to Spain and has recalled that these are contracts between companies with a validity of ten years. “Today it is working normally,” she stressed.

Albares reiterated that the Spanish Government’s wish is to maintain the best relations with Algeria, as with other neighboring countries, based on the principles of the friendship agreement that Algeria has put on hold and which are respect for sovereignty, non- interference in internal affairs and cooperation for the mutual benefit of the two peoples. The minister did not want to reveal whether there have been any contacts with the Algerian authorities, citing the need to maintain discretion.

Algeria announced the freezing of trade with Spain hours after President Pedro Sánchez ratified in Congress the change in Spain’s position on the Sahara, considering the autonomy offer presented by Rabat as the “most serious, credible and realistic” formula for resolve the conflict. The Algerian Presidency reacted by announcing the immediate suspension of the friendship, good neighborliness and cooperation agreement signed with Spain on October 8, 2002, due to the “unjustifiable turn” of the Spanish Government regarding Western Sahara, by aligning itself with the formula “illegal and illegitimate ” of autonomy advocated by the “occupying power”, referring to Morocco.

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