The Maghreb : macroeconomic performance, reform challenges and integration with the EU

Since the start of the Arab Spring in 2010, all the Maghreb countries except Algeria have gone through a political transition, a process that in the case of Libya has entailed a civil war and, subsequently, the temporary division of the country. Nearly five years later, the performance of the Maghreb economies remains much weaker than in the previous ten years. While prudent policies have allowed Morocco to make substantial progress with economic stabilisation and reform, the other three Maghreb countries continue to be affected by internal conflict or security issues (Libya and Tunisia), the decline in international energy prices (Algeria and Libya, which remain heavily dependent on oil and gas exports) and insufficient progress with structural reforms. Moreover, all these countries, and in particular Tunisia, are very dependent on the EU economy so that the persistent weakness in the latter has continued to limit their capacity to recover. While Morocco and Tunisia seem determined to pursue their integration with the EU, notably through the signing of Deep and Comprehensive Free-Trade Area agreements, Algeria's regime remains reluctant to do so. Libya, for its part, has not even signed an Association Agreement, reflecting, until 2011, the political isolation of the Gaddafi regime and, more recently, political instability. Also, while Morocco and, especially, Tunisia are on their way to becoming full-fledged democracies, steps in this direction have been much more limited in Algeria and have been interrupted in Libya. In this context, the EU and the international community have been providing substantial financial assistance to both Morocco and Tunisia. The recent migration crisis in Europe further underlines the importance of restoring political and economic stability in the Maghreb and the supportive role that the EU can play to that effect.