Italy to unfreeze $505 million in Libyan assets

Italian Prime Minister Silvio Berlusconi said that Italy plans to release €350 million ($505 million) in frozen Libyan assets, as Britain pressed South Africa to drop its opposition to UN Security Council moves to unfreeze $1.5 billion.

Berlusconi made the announcement following a meeting in Milan with the leader of Libya's rebel Cabinet, the second stop of a European diplomatic tour to push for the urgent release of billions of dollars in frozen Libyan assets.

Mahmoud Jibril was in Paris on Wednesday and heads from Italy to Istanbul for a meeting of the so-called Contact Group of 30 nations.

The Libyan opposition says it urgently needs at least $5 billion in frozen assets to pay state salaries, maintain vital services and repair critical oil facilities.

"We are here for an urgent call," Jibril said. "There are high expectations. While the liberation of Tripoli is in the last and final stages, the battle is still going on. We need urgent help."

Jibril warned that stability and security were at risk if rebel salaries, unpaid for four months, weren't delivered. Among the other urgent priorities, he said, were collecting weapons, rebuilding a justice system and national army, providing care to the wounded in Libya and abroad, and rebuilding power stations.

The U.N. Security Council, meanwhile, is preparing to vote this week on a resolution that would release $1.5 billion in Libyan assets in U.S. banks that the world body froze to thwart Gadhafi's ability to wage war on his people. Analysts estimate that as much as $110 billion is frozen in banks worldwide.

The United States has been trying for more than two weeks to get the Security Council committee that monitors sanctions against Libya to unfreeze the U.S. assets to pay for immediate humanitarian aid, but diplomats said South Africa objected. In the committee, agreement of all 15 council nations is required.

British Prime Minister David Cameron called South African President Jacob Zuma and they "agreed that Libya now has the opportunity for transition to a peaceful, democratic and inclusive government and they discussed how the international community should actively and urgently support this process," Cameron's office said in statement.

Zuma has pledged to support the release of $500 million, and said African leaders meeting Thursday in Addis Ababa would discuss the unfreezing of additional assets.

British Defense Secretary Liam Fox said that South Africa must join others in siding with the Libya people, and believed there would be "huge moral pressure" on Johannesburg.

"They wanted the world at one point to stand with them against apartheid," Fox told BBC radio. "I think they now need to stand with the Libyan people, help unfreeze their assets and allow their authorities to get access to the capital they need to rebuild the country."

Joining the chorus for speedy U.N. action, Turkey's foreign minister pressed the United Nations to urgently unfreeze Libyan assets and alleviate the rebels' financial needs. Speaking at a meeting of the so-called Contact Group of nations leading efforts to stabilize Libya, Ahmet Davutoglu also said NATO operations should be maintained until "physical security prevails."

In Milan, Berlusconi's meeting with Jibril started just moments after the release of four Italian journalists taken at gunpoint in Libya in a raid Thursday. "We consider it a good omen for the future," Berlusconi said.

Berlusconi described the planned release of (euro) 350 million as a first tranche, but he indicated no time frame. Italy has not disclosed the total Libyan assets held in Italy, Libya's former colonial ruler and biggest trading partner. Any release of Libyan assets from Italy or elsewhere would require a U.N. resolution.

The Italian leader also said that the chief executive of the Italian oil giant Eni, Paolo Scaroni, would travel to Libya next week to sign an agreement with the Libyan transitional council to supply gas for vehicles and natural gas to make electricity to meet immediate needs.

Scaroni, who sat in the front row of the press conference with Foreign Minister Franco Frattini, said after that the supplies would be repaid in petroleum when oil production resumes. Eni executives have said that would be about a year after the security situation permits oil workers to resume work at the installations.

Berlusconi repeated Italy's position that the next Libyan government include all elements of civil society, and that the national transition council will not permit acts of revenge against those who remained loyal to Gadhafi.

Trade between Italy and Libya amounted to €11 billion ($15.9 billion) in 2010, before trade between the countries was halted in February with the outbreak of civil war. That was down from a pre-economic crisis high of €20 billion ($28.9 billion) in 2008.

Eni already has dispatched technicians to Benghazi to prepare to restart oil and natural gas production. Eni, which derives 13 percent of its revenues and 15 percent of its production from Libya, pumped about 280,000 barrels of natural gas and oil a day before the civil war.


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