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Italy to unfreeze $505 million in Libyan assets
Berlusconi says Italy to unfreeze $505 million in Libyan assets held in Italian banks
By The Associated Press

MILAN (AP) ' Italian Prime Minister Silvio Berlusconi says Italy is preparing to release euro350 million ($505 million) in Libyan assets frozen in Italian banks.

Berlusconi described the planned release as a first tranche. Italy has not disclosed the total Libyan assets held in Italy, Libya's former colonial ruler and biggest trading partner.

Berlusconi made the announcement following a meeting Thursday with the leader of Libya's rebel Cabinet on the second stop of a European diplomatic tour aimed at securing the release of billions of dollars in frozen Libyan assets.



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

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

MILAN (AP) ' Britain's prime minister pressed South Africa on Thursday to drop its opposition to U.N. Security Council moves to unfreeze Libyan assets.

British Prime Minister David Cameron called his South African counterpart Jacob Zuma as the leader of Libya's rebel Cabinet headed to Italy, his second stop on a European diplomatic tour aimed at securing the release of billions of dollars in frozen Libyan assets.

Mahmoud Jibril was meeting with Italian Premier Silvio Berlusconi in Milan on Thursday, a day after laying out plans in Paris for the governing Libya after the fall of Moammar Gadhafi's 42-year autocratic regime.

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

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 are 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 $1.5 billion in assets to pay for immediate humanitarian aid, but diplomats said South Africa objected. In the committee, agreement of all 15 council nations is required.

Cameron and Zuma "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."

Italy, Libya's old colonial ruler, developed into Libya's largest trading partner as old colonial resentments matured into mutually beneficial economic ties ' which were wortheuro11 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 ofeuro20 billion ($28.9 billion) in 2008.

Foreign Minister Franco Frattini says he expects the rebels to honor all business contracts with Italian firms. That includes those with the oil giant Eni, the largest foreign producer in Libya.

"They have committed to honor all of the contracts, also those of Italian businesses, that were signed by Libya. They weren't contracts with Gadhafi," Frattini told RAI state radio.

Eni 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, has said it can take up to a year to relaunch oil production, and several months for natural gas.

Before the civil war, Eni pumped about 280,000 barrels of natural gas and oil a day.

Libya's sovereign wealth fund also has notable stakes in Eni, Unicredit bank, the Juventus soccer club and the defense and aerospace company Finmeccanica. In addition, Eni and Finmeccanica, along with their subsidiaries, have significant investments in the country, where some 600 small and medium Italian businesses are eager to relaunch operations.

Meanwhile, four Italian journalists taken at gunpoint in Libya were freed Thursday in a raid on the house where they were being held.

Details of the raid, first reported on Corriere della Sera's website, and who conducted it were not immediately available. The Italian Foreign Ministry confirmed that the four were freed, but had no further details.


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