The challenges facing Algeria today are numerous. Yet the major problems are socio-economic and closely related to the massive drop in oil revenues. The population’s habits and expectations of social benefits through a generous yet ineffective subsidy system are clashing with an ever decreasing budget. The older generation’s commitment to the current system’s ‘historical legitimacy’ might have a hard time containing the tensions emerging amongst the population, especially disenchanted youth. Algeria has yet to adopt a comprehensive set of socio-economic reforms and its old rulers have to commit to generational renewal and to power sharing before demands start becoming revolutionary.