Algeria

For more information see the website of the Embassy of Italy in Algiers

Political Relations
Italy places top priority on ensuring adequate support to the stabilisation and consolidation of Algeria, and contributes economically to its gradual development, deregulation and modernisation. Algeria is one of Italy’s most strategic partners, considering the energy partnership between the two countries and the shared objectives of creating an area of security and prosperity in the Mediterranean and combatting terrorism, organised crime and illegal immigration. For this precise reason Italy has never failed to offer its political and economic support to Algeria even during the most difficult years of the civil war, as the Algerian authorities have acknowledged.
Political relations between Italy and Algeria have traditionally been marked by a convergence of views on the main international political concerns (Middle East peace process, UN Security Council reform, Euro-Mediterranean policies) and were sealed with the signing of a Friendship, Cooperation and Good Neighbour Treaty in 2003 calling for annual high-level political and institutional consultations to be held alternately in Algiers and Rome.
 
Visits and Meetings
Numerous political encounters and visits have been exchanged over recent months: on 14/15 November 2006 the Italian Prime Minister visited Algiers and on 16/17 April 2007 the foreign minister visited Algeria. In the context of the Friendship, Cooperation and Good Neighbour Treaty the first bilateral summit was held in Alghero between the Prime Minister and President of the Algerian Republic Bouteflika, and the second is planned for Algeria in the autumn of 2008, along with Algerian Foreign Minister Mourad Medelci’s visit to Italy and the 9th session of the joint economic commission in Algiers.

In addition to the Prime Minister, participants in the Alghero summit—the first held by Italy with a non-European country—included the Ministers for Foreign Affairs, the Interior, Defence, Economic Development and International Trade. A Joint Declaration was signed at the summit’s conclusion confirming the excellent relations between Italy and Algeria and marking the shared desire to create a global partnership and both countries’ interest in deeper collaboration in various sectors of activity that include the fight against terrorism and illegal immigration and the defence sector.

Economic Relations
Italy is one of Algeria’s top trade partners, ranking second in both exports and imports, and total trade for 2007 peaked at nearly 8.2 million euro. Italy’s main exports to Algeria are steel and various types of machinery. Italy’s imports from Algeria are almost exclusively hydrocarbons and refined petroleum products (approximately 98% of total imports). Italy’s heavy dependence on energy product imports are the cause of its negative 2007 trade balance of approximately 4.5 million euro.

With the goal of balancing of that trade deficit, the Algerian authorities have repeatedly asserted, and also at the Alghero summit, their desire to encourage the activity of Italian firms in Algeria, both as regards the construction of major infrastructures over the coming years as well as through a stronger presence in the context of the privatisation process.
The number of Italian firms in Algeria has risen significantly over recent years, and the present total of over 130 firms there are operating in a variety of economic sectors: industrial plants, water, energy, food and agriculture, catering, environment, civil and infrastructure construction. There was an upward trend in the awarding of public works projects in 2007, with Italian firms winning bids valued at approximately 3.5 billion euro (as compared with the 1.4 billion of 2006) for projects in the sectors of railways and transport, electrical power and hydrocarbon production and distribution.

The only Italian bank with an branch office in Algeria is Monte dei Paschi di Siena.

In the context of Italo–Algerian relations separate mention needs to be made of the energy question. Algeria is Italy’s main supplier of natural gas and covers 35% of our national requirements. Algeria exports gas to Italy mainly by means of the Transmed gas pipeline (managed by the Italian company ENI through TTPC) connecting Algeria to Sicily through Tunisia, which has a capacity for approximately 27 billion cubic metres annually.
In view of this increased capacity for transporting Algerian gas to Italy, with the aim of introducing it onto the European distribution market as well, the decision was made to proceed along a twofold path: to boost the capacity of Transmed (to 34 billion cubic metres annually) by the end of 2008; and to build a new gas conduit—the GALSI—directly linking Algeria with Sardinia and Tuscany, and which is to be operational in 2011. An intergovernmental agreement was signed on 14 November 2007 during the summit in Alghero providing for the construction of the new gas conduit, which will have a capacity of 8 billion cubic metres.