Italian Prime Minister Georgia Meloni made an official visit to Algeria, January 22-23, 2023, her first visit since taking office last October. The main objective of the visit was to strengthen Italy’s economic and trade relations with Algeria, and to ensure the supply of natural gas. Italy is seeking to become the center for marketing Algerian gas to Europe, and to develop partnerships in important industries and renewable energy, as well as shipbuilding, given Italian expertise in that respect.
Italy also wishes to stop irregular migration flows to Europe, and to stop cross-border terrorist activities, especially by organizations active in the Sahel region. Meloni and her high level official delegation were received by Algerian Prime Minister, Ayman bin Abdelrahman, and the Minister for Foreign Affairs, Ramtan Lamamra, in the Algerian capital.
Successive Visits
This is the first visit by Meloni to Algeria since she became Prime Minister last October, and the third official visit by an Italian prime minister during the last nine months. The last official visit, six months ago in July 2022, was by Italian Prime Minister Mario Draghi, on the occasion of the fourth bilateral high-level summit between the two countries. Before that, PM Draghi had also visited Algeria in April 2022, which was reciprocated by President Abdelmadjid Tebboune’s visit to Italy in May 2022. Prime Minister Sergio Mattarella visited Algeria in November 2021. These successive official visits reflect the Italian government’s ongoing desire to strengthen bilateral relations with Algeria.
This was also PM Georgia Meloni’s second visit to an Arab country, having visited Iraq last December. Algeria, however, counts as her first visit to North Africa and the Maghreb, reflecting the new Italian government’s foreign policy orientation, and the prioritization of national interests.
The Italian Embassy in Algiers announced during the visit a program of cooperation between Industrial Union of the City of Naples (UIN) and the Mitidja Entrepreneurs and Industrialists Club, and the formation of an Italian-Algerian business Forum, to be held on 25 January in Naples, Italy, to promote cooperation and economic partnership between Algeria and Italy beyond the energy sector.
Mutual Interests
The Italian PM’s visit to Algeria is important in view of recent efforts by Italy and Algeria to achieve a range of political, economic and security objectives, including:
Strengthening strategic partnership: Algeria and Italy aim to intensify their bilateral cooperation, to reach a level of strategic partnership which extends to the regional level, given their geographical proximity. This requires frequent consultations on a variety of issues of common interest, including, energy, economic ties, political relations, and security issues such terrorism and illegal migration.
Ensuring energy supplies: PM Meloni’s visit reflects Italy’s preoccupation with securing natural gas imports to meet energy needs. Algeria has become Italy’s first supplier of gas and main partner in Africa, under the agreement to increase Italy’s gas supplies from Algeria to more than 25 billion cubic meters by the end of 2022. According to available statistics, Italy imported a total of 22.1 billion cubic meters of gas between January 1st and the 13th of December 2022 via the Trans-Mediterranean pipeline. Italy wishes to raise this amount by another 9 billion cubic meters to 30 billion cubic meters per year.
Claudio Descalzi, CEO of Eni SBA, recently stated that Italy’s gas supply for next winter is more secure, and that the country can have sufficient gas in 2023 and 2024, if it can increase imports from Algeria. Rome has emphasized its confidence in Algeria as a key and trustworthy partner, that will provide its energy needs, prompting the signing of further agreements between Eni and Algeria to increase production. Moreover, an agreement to export electric power to Italy from Algeria was signed, as it now has a surplus of electric energy estimated at about 8 MW. The construction of a sea cable between the two countries to carry this surplus electric energy to Italy could also be discussed.
Economic cooperation: The visit comes in the context of Italy’s efforts to strengthen economic and trade relations with Algeria by following up on the implementation of the agreements signed during 2022. In mid-October, a framework agreement was signed between the Ministry of Industry and the Italian automotive company Fiat, a subsidiary the Stillantis Group, for the implementation of a project to produce lightweight vehicles in Oran, west of Algiers. The agreement would give the Italian company a significant share of the Algerian market, as the country has limited its imports of new cars since 2017. This has led market demand to outstrip supply, pushing up the price of vehicles. In this context, Italian vehicle manufacturing in Algeria is a pillar of Meloni’s plans to diversify the partnership between the two countries beyond the energy sector. It is expected that the Italian Fiat manufactured in Oran will be unveiled on March 19th , and will be marketed before the end of this year.
Strengthening Algeria’s industrial sector: Memorandums of Understanding (MoUs) have been signed for cooperation in areas of traditional industry, pharmaceuticals, construction, investment development, and the prevention of corruption, as well as for public works, startups, energy, renewables and otherwise, and social development and . Italy is seeking to increase the volume of trade with Algeria by about USD10 billion in 2022, including USD8 billion in imports of Algerian gas. In 2021, trade between Italy and Algeria amounted to EUR7.33 billion, including EUR5.57 billion in Algerian exports and EUR1.76 billion in imports.
Attracting Italian investors: Algeria seeks to attract higher levels of FDI, which reached about 7.46 billion Algerian dinars according to Prime Minister Abdel Rahman’s statements at the Italian Algerian Economic Forum last July. This is considered an inadequate volume, in view of the strengthening of political relations between the two countries, as well as Algeria’s recently passed Investment Law, which provides facilities for foreign investors in an effort to diversify the economy away from the energy sector.
Taking advantage of Italy’s shipbuilding expertise: Algeria wishes to draw on Italian shipbuilding expertise to maximize its economic gains. The two countries agreed to strengthen cooperation between Finn Cantieri, Italy’s maritime manufacturing industry, and Mers El Kebir port in Algeria, to implement a project to build long fishing vessels to help Algeria catch large quantities of tuna abundant in its national waters.
Halting illegal migration flows: The visit included a discussion of illegal migration as a problem affecting successive Italian governments. In this context, Algeria highlighted its role in reducing the flow of illegal migration from its coastline to the south of Italy. The importance of implementing the agreement signed with the Italian Ministry of the Interior to police borders and combat terrorism and illegal trafficking of migrants was emphasized. Algeria has declared its commitment to control its borders and coasts and its embassy is coordinating with Italy to identify illegal migrants who are being stopped in Sardinia in southern Italy. PM Meloni’s visit to Algeria included a follow-up and signature of the draft security agreement between Algeria and Italy on the movement of persons for entry into force.
Important implications
Italy will be the center for distributing Algerian gas to Europe. Italy hopes to become an energy hub, distributing Algerian gas to Europe, as well as a center for marketing Green Hydrogen for the Mediterranean region as a whole in the future. Effectively, Italy will be acting as a bridge between the continents of Africa and Europe, a role which Spain aspired to. The statements of the Algerian Ambassador to Italy Abdelkarim Tawahiri confirmed that Italy was Algeria’s first partner in energy, as illustrated by the scale of agreements signed between the two sides, including cooperation agreements between Sonatrach and Eni Italy, for the research and exploration of oil and natural gas wells in southern Algeria.
The two countries agree on regional issues. The views of Algeria and Italy are consistent with regard to regional issues, particularly concerning the Libyan crisis. They both support the Dbeibeh government and the holding of presidential and parliamentary general elections, which would help to reach political consensus and a resolution to the Libyan crisis. Italy’s position vis-à-vis the Libyan crisis stems from its fear that the unstable political and security situation in Libya will continue, resulting in an increase in the number of illegal immigrants to Europe.
Enhancing Italian presence in the Maghreb. Italy seeks to strengthen its role and influence in Algeria, the Maghreb, and North Africa in general, to balance France’s declining role in this strategically important region. Although French President Emmanuel Macron is making sustained efforts to restore relations with Algeria, Italy appears to have a historic advantage. As both Italy and Spain are experiencing tensions with Algeria, Italy appears to have a wide scope for strengthening its political and economic partnership at their expense. This is particularly true in reference to Spain, as Madrid’s position on the Western Sahara has led Algeria to suspend the Treaty of Friendship and Trade Relations with Spain.
In conclusion, the visit of Italian PM Meloni to Algeria illustrates that she has adopted the same foreign policy as her predecessor, Mario Draghi, towards Algeria. This policy aims to establish strategic relations with Algeria, and place Italy as its first importer of natural gas. Although Meloni’s government adopts far-right policies, it has placed ensuring the supply of gas and making economic gains through partnering with Algeria above its ideological orientation.