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Cross-Mediterranean Economic and Political Relationships

political relationships


North Africa and the Middle East are getting more important in the eyes of the European Union which wishes to foster deeper relations with countries in these regions. The EU tries to establish different initiatives to support the countries in the Southern Mediterranean.

The South Mediterranean countries (SMC) encompass five countries, e.g. Egypt, Morocco, Libya, and Tunisia. These countries are correlated and bound by strong economic and political ties. They all have the Mediterranean in common, which was the main factor in the flow of information, transport, and exchange of goods. Still, all of this can be referred to as blissful past, whereby the role of the Mediterranean and these countries has changed significantly in modern day and age. Nowadays, the Mediterranean is rather associated with blockage and barriers that were built between the Northern and Southern costs. Many initiatives were launched to improve the position and to bring back the glory from ancient times, but they often ended in a dead end.

Still, many political leaders do not want to give up on the goal and are hopeful to reunite the regions by launching further initiatives. For example, the latest proposal includes a Euro-Mediterranean Economic Area which should be accomplished by 2030. This gives the political leaders plenty of time to plan carefully every detail of the cooperation.

What Can Be Done in the Meantime?

In order to prepare the ground for the major initiative in 2030, the Mediterranean region will be further supported through short-term measures like financial assistance, opening the European markets of labor and goods in order to foster the cooperation between Europe and the SMC.

These small steps that should lead to the final objective are supposed to be conducted on the basis of understanding and mutual respect. These steps will require deep market analyses and political willingness on both sides.

The European Bruegel institution which is a think tank for policies development is already working on the implementation by exploring the depths of integration between European countries and the SMC region. The factors they took into account are investments, migration, financial flows, and funding or provided aid. Geographic distance, the size of countries, economic strength and development will serve as measurements to establish consistent and efficient interaction.

Trade data have shown that some of the SMC countries’ trades with Europe reach over 50%. According to statistics, France is the major source of Foreign Direct Investments (FDI) in all five SMC countries.
Italy seems to be fond of FDI in Tunisia, Egypt, and Algeria. Surprisingly, Italy is not FDI-oriented towards Libya to the extent one would expect considering their geographic proximity and historical ties. The three major political actors of the EU, Germany, and UK seem not to take too much interest in the region if we consider their investments in the SMC countries. The USA also seems to be reserved, and has not directed significant funding to the region.

When it comes to financial sector representation, France is again number 1 in the region. Only recent banks seem to be the holders of foreign claims in the region, followed by Italy whose presence is also notable. Germany, UK, and the USA, AND Spain, are not represented if we take into account their presence in other countries concerning foreign claims in the financial sector.

Migration Flow

Migration flows the took place over the centuries are mostly based on geographical and historical ties between the countries, so for example, Moroccans and Algerians mostly migrated to France, whereby also many Moroccans and Tunisians found their new home in Italy. And as in the two previous sections, financial sector and trade, the USA, Germany, and the UK seem to have taken in a handful of SMC immigrants if we compare it to the number of migrants from other countries like Turkey, India, etc.
When it comes to development assistance and funding, Germany and the USA take on a more significant role in helping Egypt and Libya, while France and Spain dominantly offer aid to Morocco, Algeria, and Tunisia. The UK remains reserved on this issue as well and does not show significant presence.

The Outcome and Possible Obstacles

All of these data can help identify the individual relationships between EU countries and the SMC countries. It can contribute to efficient projections and predictions of how the relationships will carry on. For an improved cooperation, it is necessary that SMC representatives act accordingly in the EU member states, and based on the statistics they prevail in Spain, Italy, and France, the countries that are geographically closer to them.

Difficulties could arise if we take the economic distance between UK and Germany and the five SMC countries. Predictions remain uncertain and economic cooperation might be a little bit risky since Germany and UK are underrepresented in the SMC region. This inconvenience requires a closer political partnership between the economically distant participants. The economic relationships need to be reformed to a certain extent in order to balance out giving more space to global powers such as Germany and the UK.