Libya’s Coalition to create funds for rebels

Libya’s Coalition to create funds for rebels

The NATO-backed coalition in Libya has said it will create a fund for rebels fighting the government of Muammar Gaddafi.

The decision was part of the outcome of Thursday’s meeting of the Contact Group on Libya, held in Rome, Italy’s capital.

Italy said that the temporary special fund would aim to channel cash to the opposition administration in its eastern Libyan stronghold.

The Transitional National Council (TNC), based in Benghazi, has appealed for loans of up to three billion dollars, saying they need around half of that for food, medicine and other basic supplies.

But efforts to unblock Libyan state assets frozen in overseas accounts, or to allow the rebels to get past UN sanctions that prevent their selling oil on international markets, have been held up.

"We'll be discussing a financial mechanism, we'll be discussing other forms of aid," Hillary Clinton, the US secretary of state, said at a joint news conference with Franco Frattini, the Italian foreign minister.

"I will be formally announcing our non-lethal assistance so I think that there is an effort with urgency to meet the requests that the TNC is making," she said.

Available funds

Clinton said the US government would try and free up some of the 30 billion dollars it has frozen in Libyan assets to help the TNC.

She said that the administration of Barack Obama was considering the possibilities of tapping some portion of the assets owned by Gaddafi and the Libyan government in the United States, so as to make those funds available to help the Libyan people.

However Britain has said it has no plans to contribute to the new fund because it had already made a "very substantial" contribution to humanitarian assistance.

Fund as loan

Report says it has been suggested that the money would not be a gift, but a loan from the coalition countries.

This would probably be repaid by oil sales, which Qatar had already started with one shipment of oil.

The countries that recognise the rebel council, France, Italy and Qatar, are the ones with which the TNC will do business.

France and Italy will be administering the fund.

Analysts say that France and Italy’s control of the fund is bound to lead some people to think that it is quite a good way of persuading a cash-strapped eastern Libya in Benghazi to accept a deal which is going to put oil and money into the hands of countries like France, Italy and Qatar.

They said that although it looks like benevolence, there was a hard headed financial imperative that goes underneath it.

The Chief spokesman for the TNC, Mahmoud Shammam, has said on Wednesday, that the rebels urgently need 1.5 billion dollars to cover immediate running costs.
"We need this for medical supplies, for food supplies, to keep the minimum functions of normal life - electricity, running hospitals etc," he said.

Shammam noted that the rebels would also press for better weapons and equipment, saying that they are "hungry for basic arms."

The meeting of Libya Contact Group brought together foreign ministers from countries including France, Britain, the United States, Italy and Qatar as well as representatives of the Arab League and the African Union.

British officials said the Rome meeting would seek to impose new restrictions on arms smuggling and mercenaries operating within Libya, and hoped the contact group would work on action intended to restrict Gaddafi's exports of crude oil and his ability to import refined oil products.

Libya battle

As the ministers met in Italy, fighting continued on the ground in Libya.

A rebel spokesman in opposition-held Zintan, southwest of the capital, Tripoli, Abdulrahamn, said pro-Gaddafi forces had fired about 50 Russian-made Grad rockets into the town so far.

Abdulrahamn said that the first salvo landed early in the morning, but noted that there were no immediate reports of casualties.

Al Jazeera/Williams