Libya and Italy revive 'friendship deal'

Libyan Transitional National Council chairman Mustafa Abdul Jalil (l) shakes hands with Italian Premier Mario Monti in Rome Mario Monti (r) is expected to visit Tripoli in January

Italy and Libya will revive a suspended "friendship treaty", Italy's prime minister and Libya's transitional national council head have said.

Mario Monti made the announcement after meeting Libya's Mustafa Abdul Jalil in Rome.

The treaty was originally signed by ex-leader Col Muammar Gaddafi and former Italian Prime Minister Silvio Berlusconi in 2008.

Mr Monti also said Italy would continue to unfreeze Libyan holdings.

Some 600m euros ($780m; £508m) in assets have already been released.

Oil concessions

Mr Jalil, who also met President Giorgio Napolitano, pledged to use the unfrozen funds to pay debts to Italian companies.

Italian oil giant ENI, partially state-owned, had reached 70% of its pre-conflict output capacity in Libya, Mr Jalil said.

Under the 2008 treaty, ENI is to pay 15bn euros to build a super highway crossing the north African desert coastline, linking Libya with its neighbours Tunisia and Egypt.

In exchange, the oil firm secured important oil exploration concessions.

It is not clear whether Rome's original pledge to pay Libya $5bn in compensation for its 30-year colonial rule will form part of the revived arrangement.

The BBC's David Willey, in Rome, says that despite the public assurances of closeness, behind the scenes, there is some competition between Italy and France to secure Libyan oil contracts and other new business for reconstruction.

French Foreign Minister Alain Juppe paid a surprise lightning visit to Tripoli on Wednesday, pre-empting Mr Jalil's visit to Rome.

Our correspondent says that his purpose, in part, was to remind the new Libyan administration that France also expects to be rewarded for its leading role in the Nato military operations which led to the downfall of Col Gaddafi.

Italian newspapers report that Mr Monti is due to visit Tripoli next month.

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