FIW-PB 75 North African Economies: Recent Developments and Linkages with the EU and Austria

Abstract: This policy brief discusses recent macroeconomic developments in the North African economies of Algeria, Egypt, Libya, Morocco, Tunisia, and Sudan as well as recent patterns of trade with the European Union (EU) and Austria, pointing to opportunities as well as challenges. Against a backdrop of supply-chain disruptions, geopolitical fragmentation, and rising vulnerabilities associated with technology dominance, critical raw materials, and energy security, North Africa has acquired renewed strategic relevance for European economic policy. The region combines geographic proximity to the EU along with sizeable markets, a young population, substantial renewable-energy potential, strategic transport corridors, and growing capabilities in sectors linked to the green and digital transitions. For the EU and Austria, deeper economic engagement with North Africa can support the diversification of suppliers, reduce excessive dependencies, and strengthen supply-chain resilience. The potential extends beyond the traditional exchange of fuels and raw materials to environmental technologies and renewable energy. A forward-looking European strategy should therefore combine trade with investment in infrastructure, human capital, renewable-energy systems, and partnerships. Initiatives such as the EU’s Global Gateway, Austria’s Africa Strategy, and the proposed Hydrogen South Corridor can help to connect North African production and energy potential more closely with European markets while supporting regional integration.

Javier Flórez Mendoza & Robert Stehrer (The Vienna Institute for International Economic Studies (wiiw))
North African Economies: Recent Developments and Linkages with the EU and Austria
FIW-Policy Brief 75
October 2026
Language: English