Algeria approves a budget right at the brink

The Elcano Royal Institute is a think-tank for international and strategic studies that analyses world events and trends from a Spanish, European and global perspective.

The Analyses of the Elcano Royal Institute (ARI)are short pieces - of around 3,000 words - on aspects of current international affairs considered to be of relevance to Spain, its foreign policy or its security. In broad terms ARIs are intended to have a predictive bearing on events.This Analisys of the Real Instituto looks first at the manifestation of austerity in the new Algerian budget and the questions it raises for investment, growth and employment. It then explores the bitter opposition to the structural reforms contained in the legislation, especially insofar as they involve the private sector, foreign investment and reform of the energy industry.

Finally it sets out the three lines that the Algerian government has opted not to cross in its 2016 finance bill, but that it will not be able to defer indefinitely: cutting subsidies, opening up to the outside and good governance.