Business & Economy

Algeria freezes bank operations with Spain over Western Sahara policy shift

Algiers, Jun 9 (EFE).- Algeria on Thursday froze all banking operations related to imports and exports to and from Spain over Madrid’s policy shift on the sovereignty of Western Sahara as part of a deal to normalize diplomatic ties with Morocco.

The move comes after Algeria announced on Wednesday the immediate suspension of its 2002 friendship treaty with Spain.

Although the suspension of future operations will affect all sectors, including gas, experts told Efe the move would not affect long term gas contracts and agreements that require compliance.

Algeria has been Spain’s main supplier of gas and in 2021, Spain was Algeria’s third largest customer behind Italy and France.

While the Spanish government said it would adopt a “calm but firm” response to defend the interests of Spain and Spanish companies, the European Commission urged Algeria to revert its decision, calling it “extremely worrying”.

In recent months, Spain has prioritized gas imports from the United States, which has surpassed supplies from the Medgaz pipeline linking Spain and Algeria.

A statement from the Algerian presidency said Spain had embarked on a campaign to justify its new policy on Western Sahara, a territory claimed by Morocco but disputed by the Polisario Front, a Sahrawi independence movement backed by Algiers.

Algeria’s decision to suspend the treaty of friendship, good neighborliness and cooperation comes in response to a recent pact agreed between Madrid and Rabat, which Spanish prime minister Pedro Sánchez defended in parliament on Wednesday.

The head of the Socialist Party-led minority government said the deal to settle a diplomatic dispute was important and required compromise.

Spain-Morocco relations hit a low in May 2021 when thousands of migrants stormed Spain’s North African territories of Ceuta and Melilla from Morocco.

The crisis occurred shortly after the Spanish government granted medical care to Polisario Front leader Brahim Gali, whose movement is based in refugee camps in southern Algeria. EFE


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