Madrid urges Spanish companies to leave Algiers due to 'complicated ties'

After a year of Spanish-Algerian tensions, Madrid has called on Spanish companies based in Algeria to leave the country and bet instead on the neighbouring market of Morocco.

Last week, Madrid admitted for the first time that consequences from Spanish foreign policy shift regarding Western Saharan on trade relations with Algeria "were not measured," said high-ranking officials of the Ministry of trade during a reported meeting with Spanish companies based in Algiers.

Last March, Madrid reversed decades of neutrality regarding the Western Sahara conflict after announcing its support for Morocco's autonomy plan for the disputed territory, which offers limited self-government for the Saharawi people within Rabat's sovereignty.

The move angered the Polisario Front, the Saharawis' self-proclaimed government-in-exile, and its historical ally Algeria, who both advocate for a fully independent Sahrawi Arab Democratic Republic in the province.

Following Spain's policy shift on Western Sahara, Algeria imposed a blockade on foreign trade operations with Spain in July. 

"Madrid's policy shift was a political move to satisfy Morocco's demands without taking into account the damages that this could entail in relations with Algeria," one of the affected business owners told Spanish media El Independiente.

Over the past year, Algeria-based Spanish companies, mainly small and medium businesses, lost more than 600 million euros (US$640 million), an ongoing financial bleeding that - without the prospect of a quick resolution - accumulates new significant losses on a daily basis, said affected companies.

During a reported series of meetings with Sanchez's cabinet, Spanish companies requested a "rectification" of Spanish's foreign policy to cool tensions with Algeria. 

The trade ministry has reportedly limited itself to admitting that the situation with Algeria, which affects all areas of dialogue, is of "complicated solution." 

Instead, Madrid asked Algeria-based companies to explore new markets, namely Morocco, where PM Sanchez has secured a strong partnership with his Moroccan counterpart through a credit line of US$869 million.

Business owners say the states' suggestions "demonstrate a lack of empathy" towards companies, which may lose fortunes by competing in a new market where other strong competitors, such as France and China, are already established.

At the start of the crisis, Madrid promised to grant aid to affected businesses. "There's nothing about that," complained business owners to Spanish media, who are set to establish an association of the victims of an "uncalculated" foreign policy of Madrid.

"What we told [the trade minister] is that it is not important that they couldn't know Algeria's reaction. Now they know it (...) and they have to find a solution," one of the affected business owners told Spanish media El Independiente.