A recent study by the French think tank Institut Montaigne has revealed that diplomatic tensions between Algeria and France have had a significant impact on French businesses operating in Algeria. The study found that 600 French companies have gone bankrupt, while around 5,000 others are threatened with a similar fate. A third of these companies generate over 25% of their revenue from the Algerian market.
The study highlighted that French companies that export to Algeria are particularly affected. For example, the French tire manufacturer Michelin has withdrawn from the Algerian market, and the Renault factory in Oran has been closed since 2020. Additionally, French wheat exports to Algeria have plummeted by nearly 90%. These developments have significant economic implications for France, which is struggling with high levels of debt.
According to the study, French investments in Algeria amount to only 2.8 billion euros, primarily concentrated in non-productive services. This is in contrast to around 4 billion euros invested by rival countries such as Turkey. The study also noted that negotiations between French and Algerian companies, such as CMA CGM, regarding the exploitation of the port of Oran, have stalled.
The French Ministry of Economy and Finance has announced that France's debt levels will continue to rise, reaching 119.3% of GDP in 2026 and 121.7% in 2027. These levels are the highest since 1995, according to data from the National Institute for Statistics (INSEE). The ministry attributed this increase to a high deficit, which is expected to remain elevated in the coming years.
Ségolène Royal, president of the France-Algeria Association, has emphasized the importance of restoring good relations between France and Algeria. In a recent interview, she described Algeria as a key country in the region and a gateway to the African continent. Royal expressed her desire to see France adopt a diplomatic approach that seeks to reconcile neighboring countries rather than interfering in their conflicts.
Royal highlighted the potential for partnerships between France and Algeria in areas such as culture and education. She expressed her intention to promote a project that strengthens these ties and fosters greater cooperation between the two countries. However, she also noted that some French politicians continue to exploit anti-Algerian sentiment for electoral gain, often relying on outdated and divisive rhetoric.
The ongoing tensions between Algeria and France have significant implications for both countries and the wider region. As France continues to grapple with high debt levels and economic challenges, it is clear that restoring relations with Algeria will be crucial for reviving French businesses and promoting economic growth. The international community will be watching closely to see how the situation develops in the coming months.
Key points
- 600 French companies have gone bankrupt due to diplomatic tensions with Algeria.
- French investments in Algeria amount to only 2.8 billion euros, primarily concentrated in non-productive services.
- France's debt levels are expected to reach 119.3% of GDP in 2026 and 121.7% in 2027.
