Algeria’s Economic Reorientation: Italy Rising, France Receding, and Implications for EU–North Africa Relations

Executive Summary

Algeria is redrawing its economic map. Once heavily tied to France, its former colonial power, Algiers is now cultivating Italy as its preferred partner in energy, trade, and infrastructure. This realignment reflects both pragmatic considerations—Europe’s demand for secure gas post-Ukraine crisis, Italy’s ambition to become a Mediterranean energy hub—as well as deeper political shifts marked by lingering Franco-Algerian mistrust. Beyond bilateral ties, Algeria’s pivot reshapes EU–North Africa relations, with repercussions for energy security, migration management, and strategic competition in the Mediterranean.

Algeria–Italy: A Strategic Partnership in the Making

Energy Dominance

• Italy has overtaken France as Algeria’s primary European partner, particularly in energy.
• ENI and Sonatrach have deepened cooperation on natural gas, hydrogen, and renewable projects. Italy is positioning itself as the gateway for Algerian gas to Europe, leveraging pipelines (TransMed) and LNG facilities.
• Recent agreements expand ENI’s upstream role, ensuring Italy’s long-term stake in Algeria’s hydrocarbons while exploring green hydrogen corridors.

Trade and Infrastructure

• Italy’s role goes beyond energy: investments in port modernization, construction, and rail reflect a diversified presence.
• Rome’s pragmatic diplomacy—focused on economic mutual interest rather than historical grievances—contrasts sharply with Paris’ contested approach.

Political Synergy

• Both countries align on migration control and Mediterranean stability. Italy views Algeria as a partner to help manage North African migratory flows, while Algiers appreciates Rome’s non-interference stance.

France’s Declining Role

Historical Frictions

• Franco-Algerian relations remain hampered by unresolved colonial legacies, contested narratives over memory, and periodic diplomatic crises.
• The visa disputes of the early 2020s and Algeria’s sharp response symbolized the deep lack of trust.

Loss of Economic Ground

• French companies once dominated Algeria’s markets; today, many contracts are shifting toward Italian, Turkish, Chinese, and Gulf competitors.
• France’s attempts to “reset” ties through presidential visits and cultural diplomacy have yielded limited gains, undermined by recurring tensions and perceived paternalism.

Strategic Marginalization

• In the energy field—once a stronghold of Franco-Algerian cooperation—France lags behind. Italy’s agile positioning in the post-Ukraine energy crisis gave it a decisive advantage.

Broader EU–North Africa Implications

Energy Security

• Algeria’s gas exports are vital for Europe’s diversification away from Russia. Italy’s growing role strengthens EU resilience but concentrates influence in Rome’s hands.
• Hydrogen projects under discussion could further anchor Algeria as a key supplier for Europe’s green transition.

Migration and Security

• Italy is leveraging its Algerian partnership to negotiate frameworks for migration management. This creates an axis of cooperation within EU migration policy, though risks exist if other EU states (notably France) feel sidelined.

Investment and Competition

• The competition among EU states (Italy, France, Spain, Germany) for North African markets intensifies.
• Algeria benefits from playing partners off each other, but the lack of EU-wide coordination risks fragmenting Europe’s strategy in the region.

Regional Geopolitics

• Algeria’s pivot also recalibrates Mediterranean power dynamics:

– France’s decline reduces its leverage in Maghreb politics.

– Italy emerges as a more credible Mediterranean interlocutor.

– Algeria enhances its autonomy by diversifying beyond France, while maintaining ties with Russia and China.

Risks and Opportunities

Risks

• Overdependence on hydrocarbons: Italian – Algerian ties remain cantered on fossil fuels, raising questions about long-term sustainability.
• EU fragmentation: Rivalries between Italy and France could weaken collective EU leverage.
• Domestic instability: Algeria faces economic challenges (youth unemployment, inflation) that could strain partnerships.

Opportunities

• Energy diversification: Algeria can anchor Europe’s gas and hydrogen future if investments are structured transparently.
• Balanced diplomacy: Italy’s rise creates space for pragmatic, non-colonial partnerships.
• Regional stability: Stronger Algeria–Italy ties could serve as a stabilizing factor in the Western Mediterranean, especially on migration.

ASA Concluding Assessment

Algeria’s economic map is being redrawn Italy has become its preferred European partner, while France’s influence recedes. This transformation is not merely bilateral—it reshapes EU–North Africa relations, with direct implications for energy security, migration governance, and strategic competition in the Mediterranean.

For investors and policymakers, the message is clear: Italy is now the gateway to Algeria, and Algeria itself is positioning as a central hub in the global energy transition. However, risks of governance opacity, overreliance on hydrocarbons, and EU fragmentation remain.

In such a shifting landscape, reliable intelligence is indispensable. African Security Analysis (ASA) provides independent, field-based, and source-verified analysis to governments, companies, and institutions seeking to operate in North Africa. By mapping political risks, tracking energy and migration dynamics, and decoding local–international intersections, ASA ensures that stakeholders can navigate Algeria’s new trajectory with foresight, resilience, and confidence.