Italy worried economically as Libyan regime teeters

'The relationship has up until now been humiliating for both sides'

Libya's former colonial overlord and its top trade partner, Italy is treading cautiously as power drains from Moamer Gathafi's 41-year regime because it has a lot to lose if he goes, experts said.
"Italy has been worried because the effects would be more direct and immediate than on other countries" if Gathafi is forced to relinquish power, said Ettore Greco, director of the International Affairs Institute in Rome.
The Libyan regime has shut down illegal immigration towards Italy and holds major stakes in Italian companies including the country's top bank UniCredit, industry giant Finmeccanica and first-division football club Juventus.
Italian officials say a pact with Libya on immigration has reduced undocumented arrivals by more than 90 percent and Libya has threatened to lift controls if Europe tries to topple Gathafi.
Italian businesses also have key investments in the North African state, which accounts for 14 percent of the global output of Italian energy giant ENI.
Italy is the biggest exporter to Libya and is also Libya's biggest export market, importing around 23 percent of its oil supplies from Libya.
"The relationship is also close on a political level. The general attitude of the ruling coalition in Italy is to be very careful," Greco said.
On Saturday, amid reports of protesters being killed, Prime Minister Silvio Berlusconi said he did not want to "bother" the Libyan ruler by calling him.
Then on Monday, Foreign Minister Franco Frattini said Europe should support national reconciliation in Libya and not try to export democracy.
Only later on Monday did Berlusconi join other world leaders in condemning the "unacceptable" use of violence against civilians in Libya.
Commentators on Tuesday were scathing about the time that it took Berlusconi, who drew controversy last year for kissing Gathafi's hand at an Arab League summit in Libya, to criticise the dictator.
"Better late than never... His silence had seemed like a risky bet, maybe not sufficient to protect our interest and certainly contrary to the values of our democracy," the Corriere della Sera daily said in an editorial.
"Berlusconi's discretion has long distanced us from the United States, from Britain, France and Germany," who have condemned the Libyan regime, it said.
"We have to ask ourselves whether, if there is a change of power, this delay will not cost us in terms of our interests," it added.
Business daily Il Sole 24 Ore was even harsher over Italy's ties to Gathafi, who is a frequent visitor to Rome.
Berlusconi and Gathafi have met 11 times in the past three years, exchanging gifts and lavishing hospitality on each other.
"Italy has given Gathafi the visibility of a rock star. We've forgiven him everything... We've behaved in a paternalistic way," it said.
"The relationship has up until now been humiliating for both sides... Let's hope it changes," it added.
Italy and Libya signed a friendship treaty in August 2008 that opened a new chapter in relations and led to massive investments, formally ending historic resentment against Italy -- Libya's colonial ruler between 1911 and 1942.
Berlusconi said at the time that Italy would invest $5 billion in Libya as compensation for colonisation over the next 25 years.
"Libya is an ally. It has co-operated in a policy of limiting illegal immigration... I think relations between Italy and Libya will not change," said Andrea Margelletti, director of the Centre for International Studies in Rome.
"I think any interference now would not be appreciated," he added.
But Greco said Italy's ties with Libya could help it play a key role in aiding a transition of power in the country.
"It could have a very important role in encouraging trustworthy forces that could emerge," Greco said.
"When forces emerge that want change and are credible, then we have to intervene. Italy should not halt this process," he added.