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Germany offers to loan Libyan rebels €100 mln

The Local · 24 Jul 2011, 15:54

Published: 24 Jul 2011 15:54 GMT+02:00

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"Because of Colonel (Muammar) Qaddafi's war against his own people the situation in Libya is extremely difficult," German Foreign Minister Guido Westerwelle said in a statement.

"There is a lack of means to build up the necessary structures and to relieve supply shortages, all the way from medical equipment to food. People are suffering more and more as a result, particularly in eastern Libya."

Libya has been wracked by a civil war since a violent uprising against Qaddafi, in power for more than four decades, swept the country five months ago.

While a NATO bombing campaign has managed to prevent the fall of opposition-held cities such as Benghazi and Mistrata, it has not been able to dislodge Qaddafi's regime.

Westerwelle said that the new loans would be guaranteed by "Qaddafi's billions" - assets of the Libyan leader frozen under international sanctions - until they can be made available to the Libyan opposition.

The decision followed a meeting in Istanbul on July 16 that saw Western and regional powers boost the Libyan rebels by designating them country's legitimate rulers, a move that gives them access to vital funds.

Story continues below…

Europe's top economic power abstained on a UN Security Council resolution - it currently holds a non-permanent seat on the 15-member body and is chair this month - in March authorising a Libya mission to protect civilians and enforce a no-fly zone.


The Local (news@thelocal.de)

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Your comments about this article

17:24 July 24, 2011 by TheCrownPrince
This move is an indirect exertion of influence on an ongoing civil war. Germany should have stuck to her original decision not to interfere, because it was the right one. The situation in Libya is a mess (to put it nicely) and one could see that coming. How hypocritical to welcome Gaddafi in Paris (and elsewhere) with military honours just two years ago, and then declare him a supervillain and try to kill him - under a UN-resolution that allows military force solely to "protect civilians". Especially for Monsieur Sarkozy "human rights" were (and are) only a pretense in this matter to boost his chances for reelection by playing general. Interesting to see how this plan backfired. They should have listened to their military experts when it came to the chances of winning wars only with airstrikes.
17:55 July 24, 2011 by snowey
How totally hypocritical! First Germany abstains in the United Nations from helping the rebels back in April when they desperately needed help & now in July agrees to lend those same rebels €100 million.

Westerwelle who was instruemental in pushing for abstention now has the gall to offer €100 million in loans. The man was & continues to be an embarresment to Germany & Merkel should rid herself of such a slimy politician.
19:39 July 24, 2011 by ChrisRea
@ snowey,

It helps if you pay attention to the objectives of the actions. The Security Council resolution was about the military intervention. The loan is for civilian and humanitarian purposes. If you do not approve a certain war, you might still want to help the civilians affected by that war.

Another major difference is it is only now that the rebels were recognised by Western and regional powers as Libya's legitimate rules.
22:26 July 24, 2011 by lwexcel

" The loan is for civilian and humanitarian purposes."

This could be, but I almost positive that there is a very healthy interest rate attached to that 'humanitarian aid.' I don't fault Germany for this, funding wars is actually a very profitable business, but that is absolutely all that this is. There is very little charity that goes into lending funds to someone guaranteed by the full faith and credit of someone else's money that is already in your vaults.

-War profiteering by any other name.....
23:01 July 24, 2011 by ChrisRea
@ lwexcel,

First of all, we have no information about the interest rate, so we cannot talk (yet) about "war profiteering" in this case. As Germany recognised the rebels as the legitimate representatives of Libya, any other country could have given them a loan, as it would be guaranteed with the same assets. My guess is that it was only Germany that had the cash available.

Nobody talked about charity and we cannot say that Germany was hypocritical this time. But if we talk about Saudi Arabia or other sales of weapons ...
01:31 July 25, 2011 by lwexcel

Hmmmmm it is funny that we cannot yet talk about 'war profiteering' due to not knowing the interest rate, but should freely accept you to 'guess' Germany had the cash readily available.

The concept of war profiteering is that an entity makes profits from providing goods or services to another party that is currently at war, therefore if Germany charges even a fraction of a percent on the loans they are by all means profiting from a war. I already see it as a foregone conclusion that they are indeed charging interest on this money, but I will leave it to you to figure out for yourself the semantics of this particular situation.

Hypocrites?.....No not at all I would see Germany in this case as acting more like a bank. Being that it is usually the business of banks to lend out funds and generate returns through the use of other peoples capital.
04:52 July 25, 2011 by wenddiver
The Rebels are Civilians, so any weapons purchased are for Civilian use???? Stop lieing to ourselves, the West had wanted Qadaffi gone for a long time, so go in and remove him, A short vilent war will harm fewer civilians in the long run than a long slow one.
08:43 July 25, 2011 by sunil2050
shame on you germany ..... i thought you were the lotus of the dirty pond
08:50 July 25, 2011 by ChrisRea
@ lwexcel,

Apparently we do have to clarify definition(s) here. I would say that a commonly accepted definition for war profiteer is "any person or organization that improperly profits from warfare or by selling weapons and other goods to parties at war". Extending the definition to loans, it is war profiteering only if there is an improper level of interest. If not, not.

My guess that only Germany had cash available is based on how the economy is going in the Western countries, the amount of money contributed to the bail-out of Greece and reports that German banks were actually prepared to contribute even more. Is there any country that participated in the Istanbul meeting which could compare to Germany in this regard?
10:01 July 25, 2011 by lwexcel

Well I see you are well versed in researching on Wikipedia, it is working with logic that seems to throw you off. If Germany is lending money (at an interest rate, again foregone conclusion) and the people that receive it use it to purchase goods, then Germany is by default providing them with goods. Secondly what is an improper level of interest? (I personally think that charging any amount of interest to a party currently involved in a conflict against oppression is improper). Also interest rates on loans are determined by the risk that the lender assumes in lending the funds to the lendee, so I ask you what greater risk is there than war?

The Western countries? That must be excluding Canada, Sweden, Denmark, The Netherlands, & Switzerland. But why does it even need to be a Western country? I am asking this because China and India both voted for an abstention and both have bigger economies and cash reserves than Germany. So if it were just a matter of having cash available would they not be the best sources of funding?
10:42 July 25, 2011 by ioann
Humanitarian yeah right.... They're just usurers who love to lend money. I bet they're gonna lend them the money with ridiculous interest, and then loan them some more when they can't pay back. Just like they're doing with Greece.
12:40 July 25, 2011 by ChrisRea
@ lwexcel,

Yes, I agree that it not easy to determine if a certain interest in this case would be improper. Unless if the interest rate is at a rate comparable with one use within Europe for example. Then we would be able to say that it is definitely not improper. This is why we need to know what is the actual interest rate before making futile speculations.

Why China and India would not lend money to the rebels? Because they do not recognise them fully as legitimate representatives of Libya. Why would the Western countries you mention not come with so much cash? For some might be political reasons (Sweden and the Netherlands are also against the bombing of Gaddafi), but my guess is that the main reason is that their economies/interests do not allow them to lend the rebels such a consistent amount. Why would other countries that recognised TNC as the legitimate representative not offer loans? Well, because they already did that long time ago (ex. Kuwait - $180 million, Turkey - $233 million).
16:00 July 25, 2011 by oldWine
please don't give them that money as loan. Assist them with a hope of no return.

We don't want to see that any court in Germany to seize Air Libya like the court did for Crown prince of Thailand.
17:09 July 25, 2011 by michael4096
On the one side, we have a reluctance to forment a revolt against a recognised government. And, on the other, a recognition that the world changes and, if an internal group gains enough support from the people, that they should be helped to create a new order.

I would think that this was a no brainer for our American contributers
20:34 July 25, 2011 by Jack Kerouac
How will Germans know the funds are going to the right people, and will be used in an appropriate way? It's nearly impossible to monitor how all of it is spent. Most likely it will end up being used to purchase weapons. As a result, more "civilians" will die. Wait, wouldn't the "rebels" be considered civlians, since some (if not all) don't wear a military uniform? What are Germany's interests here? With the Greece bailout and the Euro crisis in full swing, I suspect Merkel can hardly afford another huge loan to a foreign country.
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