Italy to Pay $5 Billion to Libya in Landmark Accord

Italy agreed to pay Libya $5 billion as compensation for its 30-year occupation of the country during the 20th century. The money will be invested by Italy over a 25-year period. For VOA, Sabina Castelfranco reports from Rome.

The Italian Prime Minister Silvio Berlusconi on Saturday signed a "friendship pact" with Libyan leader Moammar Gadhafi in Libya. Under the pact, Italy agreed to compensate Libya for abuses it committed during its colonial rule of the North African country.

Italy will invest $5 billion in Libya in a deal that effectively turns the page on colonial-era disputes that have long tarnished their relations. Prime Minister Silvio Berlusconi made the announcement during a visit to the Mediterranean city of Benghazi where he met Libyan leader Moammar Gadhdafi. He said the accord would provide for $200 million a year over the next 25 years through investments in infrastructure projects in Libya.

The compensation package involves construction projects, student grants, and pensions for Libyan soldiers who served with the Italians during World War II. It also includes a coastal highway stretching across the country from Tunisia to Egypt.

Mr. Berlusconi's office said in a statement that the premier would also hand over to Gadhafi the goddess Venus of Cyrene, an ancient Roman statue taken in 1913 by Italian troops from the ruins of the Greek and Roman settlement of Cyrene, on the Libyan coast.

Prime Minister Berlusconi said this agreement should put an end to 40 years of discord and is a concrete and moral acknowledgment of the damage inflicted on Libya by Italy during the colonial era. But many Libyans who lived under Italy's domination find it difficult to forget. A man says the behavior of Italians was cruel. They treated the Libyans like dogs. Italy is Libya's biggest trade partner with 25 percent of Italian oil imports coming from the North African country. It now also hopes the agreement will open the path to further cooperation.

Italy would like to see Libya crack down further on illegal migrants turning up on Italian shores and will fund $500 million worth of electronic monitoring devices on the Libyan coastline. Relations between the two countries have warmed over the last few years but it has taken years of negotiations for the two sides to hammer out a deal on compensation for Italy's rule over Libya from 1911 to 1943.Following Saturday's agreement, Libya named August 30, Libyan-Italian Friendship Day.

Remittances from Europe to MPCs

Some 7.1 billion euros are “officially” transferred each year from Europe to eight Mediterranean countries (between 12 and 14 billion including “informal” transfers). These remittances far exceed total flows of net foreign direct investment (USD 6.4 bil­lion a year, 2000-2003) and official development assistance (USD 4.3 billion a year, 2000-2003) received by these countries, according to the summary of a study by the FEMIP Trust Fund.

Remittances are therefore of considerable economic importance for the Mediterranean Partner Countries, the principal official channel for remittances is often money trans­fer companies despite them being expensive, while the funds are intended primarily for consumption purposes. They are used to improve education, health and housing conditions and only a frac­tion is channelled directly into pro­ductive investment.

The study underlines the magnitude of the volume of funds transferred, examines the obstacles hampering remittances and proposes courses of action aimed at maximising their impact on the financing of the economies of the Mediterranean partner countries.

FEMIP, the European Investment Bank’s dedicated facility for the Mediterranean, has produced a summary sheet of the in-depth analysis of financial flows from Mediterranean migrants working in Europe.

EU Resumes Financial Aid to Palestinian President's Government

The European Union resumed financial assistance to the government of Palestinian President Mahmoud Abbas, ending a boycott imposed when rival Palestinian group Hamas temporarily formed a coalition with Abbas last year.

"We have been quick to react to the new situation,'' EU External Relations Commissioner Benita Ferrero-Waldner told reporters today at a meeting of EU foreign ministers in Viana do Castelo, Portugal. "We have changed the disbursement mechanism and we have reoriented it.''

The resumption of financial aid to Abbas's Fatah government on the West Bank, first announced in June, marks the end of the financial embargo imposed on the Palestinian leadership after Hamas, a sworn enemy of Israel, became part of a short-lived Palestinian unity government last year. The economic boycott of Hamas, which is in control of the Gaza Strip, continues.

The EU has been the main donor to the Palestinians, providing 700 million euros ($964 million) in 2006. The money went for welfare support and through United Nations agencies, bypassing Hamas.

Bloomberg

US funds allies against Iran

The US has announced military aid worth more than $43bn to Egypt, Israel, Saudi Arabia and other Gulf states in an effort to boost its Middle East allies against Iran.

Egypt will receive $13bn in aid over 10 years while $30bn will go to Israel over the same period, Condoleezza Rice, the US secretary of state, said on Monday.She also said that an unspecified defence aid package was allocated for Saudi Arabia and the Gulf states.

The Saudi package is expected to upgrade the country's missile defences and air force and increase its naval capabilities, a defence official said on Saturday. Saudi Arabia and the other Gulf countries are likely to receive as much as $20bn over 10 years, he said. Rice made the announcement hours before leaving with Robert Gates, the US defence secretary, for a joint trip to Egypt and Saudi Arabia to seek the support of Arab nations in stabilising Iraq.

"This effort will help bolster forces of moderation and support a broader strategy to counter the negative influences of al-Qaeda, Hezbollah, Syria, and Iran," Rice said.

Al Jazeera