Libya and Italy in $5bn deal for compensation

TRIPOLI, Monday

Libya’s congress ratified today an accord with Italy freeing up $5 billion compensation for Italy’s colonial-era misdeeds and boosting investments which have already seen Libya buy into Italian banking and energy.

Its pariah status lifted, Libya has become a strategic investor in Italy, using its energy wealth to buy into Unicredit bank and oil company Eni and planning a joint fund with Mediobanca to invest in Italian companies.

His home town

As a sign of Tripoli’s growing importance to Italy, Prime Minister Silvio Berlusconi flew to Libya today to address the General People’s Congress, its equivalent of a parliament.

Mr Berlusconi, due to meet Libyan leader Muammar Gaddafi in his home town Sirte to mark the 32nd anniversary of the Jamahiriya administration, said on leaving Gaza talks in Egypt that the friendship pact “will launch cooperation with Libya in various sectors”.

The pact signed by Mr Berlusconi and President Gaddafi last year, which Italy’s Parliament ratified last month, involved an apology for the excesses committed in colonial rule from 1911-1943, when Libya says Italian troops killed thousands of its people.

Italy, already Libya’s main European trading partner, must also compensate Libya with investments of $200 million per year over 25 years.

Rome has also been keen to get Libya to help stop the flow of illegal immigrants from its coast across the Mediterranean into southern ports such as the Italian island of Lampedusa.

A larger role

Libya stretches along the northeast coast of Africa between Tunisia and Algeria on the west and Egypt on the east; to the south are the Sudan, Chad, and Niger.

A greater part of the country lies within the Sahara. Along the Mediterranean coast and farther inland is arable plateau land.

Libya is emerging from years of sanctions and isolation with ambitions for a larger role in Africa and in European business, via a sovereign wealth fund worth more than $65 billion. (Reuters)