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Spain vows to defend its interests after Algeria halts trade, except gas flow
Global Banking & Finance Review®
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By Belén Carreño and Inti Landauro
MADRID (Reuters) – The Spanish government will “firmly defend” its national interests in the wake of Algeria’s decision to suspend a 20-year-old treaty of friendship and cooperation and ban all non-gas trade with Spain, the foreign minister said on Thursday.
Jose Manuel Albares told reporters Spain was also monitoring gas flows from Algeria, which account for nearly half of Spain’s gas imports, and said these were unaffected by the diplomatic row over Madrid’s stance on the disputed territory of Western Sahara.
Algeria’s banking association said on Wednesday payments to and from Spain were stopping because the treaty was suspended, which, according to Algerian sources, affects all trade except for gas supplies.
“We are analysing the reach and the national and European consequences of that measure in a serene, constructive way, but also with firmness in the defence of Spain and the interests of Spaniards and Spanish companies,” Albares told reporters.
Spanish exports to Algeria include iron and steel, machinery, paper products, fuel and plastics, while service exports include construction, banking and insurance business.
Spanish energy firms Naturgy, Repsol and Cepsa have contracts with Algerian state-owned gas company Sonatrach.
Spain’s Energy Minister Teresa Ribera was confident Sonatrach would respect its commercial contracts, but acknowledged that the spat between the two nations comes at a delicate time as the prices of the 10-year supply contracts are now being revised by the companies involved.
North African gas supplies to Europe have grown increasingly important this year in light of Russia’s invasion of Ukraine.
Algeria was angered when Spain said in March it supported a Moroccan plan to offer autonomy to Western Sahara. Algeria backs the Polisario Front movement seeking full independence for the territory, which Morocco regards as its own and mostly controls.
Algeria broke off diplomatic ties with Morocco last year after the Western Sahara conflict flared again in 2020, nearly three decades after a ceasefire took effect.
Also last year, Algeria decided not to extend a deal to export gas through a pipeline running through Morocco to Spain that made up nearly all of Morocco’s gas supply. It supplies Spain through a direct subsea pipeline and by vessel.
Its treaty with Spain also committed both sides to cooperate in controlling migration flows, so its suspension could become a potential problem for Spain, the European Union and even NATO.
Spain, as host of an upcoming NATO summit, will push for the inclusion of “hybrid threats” such as irregular migration, especially on the southern flank, in the military alliance’s new policy roadmap, Albares told Reuters on Wednesday.
Spain’s shift towards Morocco’s stance on Western Sahara ended a dispute between Madrid and Rabat last year involving both the disputed territory and mass migration.
(Reporting by Emma Pinedo, Belen Carreno and Inti Landauro, Lamine Chikhi in Algiers, writing by Andrei Khalip; Editing by Hugh Lawson)
Gas imports are significant as they provide countries with essential energy resources. They can influence energy prices, national security, and economic stability, especially in regions dependent on foreign energy supplies.
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