Germany has announced that it will be freezing aid worth over $1 billion in the form of development projects in Morocco amid growing diplomatic tensions between the two countries culminating with Rabat suspending ties with the German embassy in March and recalling its ambassador to Berlin last month.
However the decision has affected aid from Germany, in particular from the Germany Society for International Cooperation and the German Development Bank, which was confirmed by a spokesperson for the Germany Foreign Ministry, noting that some projects had been "completely suspended" and that they were "affected by the unilateral policy of Morocco".
Among the key projects suspended is an agreement signed by the two countries last year for the production and research of green hydrogen, touted as an important alternative to fossil fuels by the EU.
According to its statement announcing the recalling of its Ambassador to Berlin, Zohour Alaoui, Morocco cited three grievances it had with Germany, chief among them the EU country's stance on the disputed territory of Western Sahara which was recognised by the administration of former US President Donald Trump last year as being under Moroccan sovereignty. In exchange, Rabat agreed to resume diplomatic ties with Israel.
Morocco's Ministry of Foreign Affairs accused Germany of "antagonistic activism" despite the "US Presidential Proclamation recognizing Morocco's sovereignty over its Sahara".
Rabat also criticised Germany over its "complicity" regarding an unnamed individual "formerly convicted of acts of terror."
The Moroccan government also took issue with Berlin "exhibiting continued determination to counter Morocco's influence, particularly on the Libyan issue."
At the time the German Foreign Ministry reacted by stating it was "surprised" by the move but called for working with the kingdom "in a constructive way to resolve this crisis".
In 2019, Morocco was ranked third among African countries to receive the most development cooperation aid from Germany, after Egypt and Tunisia, according to data from the German Ministry of Economic Cooperation and Development.
Morocco has been in conflict with the Algeria-backed separatist Polisario group over the Western Sahara since 1975, after the Spanish occupation ended. It turned into an armed confrontation that lasted until 1991 and ended with the signing of a ceasefire agreement.
Rabat insists on its right to govern the region, but proposed autonomous rule in the Western Sahara under its sovereignty, but the Polisario Front wants a referendum to let the people determine the future of the region. Algeria has been supporting the Front's proposal and hosts refugees from the region.
The 1991 ceasefire came to an end last year after Morocco resumed military operations in the El Guergarat crossing, a buffer zone between the territory claimed by the state of Morocco and the self-declared Sahrawi Arab Democratic Republic, which the Polisario said was a provocation.
By launching the operation, Morocco "seriously undermined not only the ceasefire and related military agreements but also any chances of achieving a peaceful and lasting solution to the decolonization question of the Western Sahara," Brahim Ghali, leader of the Polisario Front, said in a letter to the UN.