US, Europe to unfreeze billions in Libyan assets

The World

Story by Jason Margolis, PRI’s The World. Listen to audio for full report.

Libya will badly need resources to rebuild once the war is over. Tuesday, Europe and the US signaled a willingness to help on that front. They said they’re preparing to release billions in Libyan assets that were frozen during the early days of the uprising.

The US alone has some $37 billion dollars in frozen Libyan assets that it could release. The Libyan annual GDP is about $90 billion, so a $37 billion cash infusion, well, that could go a long way toward helping that country rebuild.

“It’d be equivalent in the US of handing us, I don’t know, $4 trillion or $5 trillion,” said William Martel with the Fletcher School at Tufts University. “It’d be a third, roughly, of Libya’s yearly economic output. It’s a tremendous amount of money.”

The frozen $37 billion is tied up in cash, real estate, and shares of US companies. The money belongs to the Libyan government; it just can’t get at it right now. That’s because President Obama signed an executive order last February freezing the funds and cutting off the Gaddafi regime.

But it’d be just as easy for President Obama to give the money back, said Stuart Levey, a former undersecretary at the Treasury Department and now senior fellow at the Council on Foreign Relations.

“Literally a stroke of the pen,” said Levey. “He [President Obama] can issue another executive order. The difficult piece will be to determine who actually represents the government of Libya.”

Right now, we don’t who that is.

“And so I think the great hesitation now is that with a desire to repatriate those funds back to Libya, after the Gaddafi regime has been dismantled, it’s something we don’t have the mechanisms, the levers that we know how to pull right now, until we have clear lines of authority, communication, and governance within Libya,” said William Martel at Tufts.

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