Rebels to benefit from up to $30bn of Libyan state funds

CASH-STRAPPED Libyan rebels won a financial lifeline potentially worth billions of dollars from the United States and other allies yesterday, as forces loyal to Muammar Gaddafi pounded a rebel town in the west.

Secretary of State Hillary Clinton said Washington would seek to unlock some of the $30 billion (€21bn) of Libyan state funds frozen in the United States to help the rebel movement.

Italy, host of a meeting in Rome of the “Contact Group” on Libya, said a temporary special fund would be set up by allied nations to channel cash to the rebel administration in its eastern Libyan stronghold of Benghazi.

A rebel spokesman in Zintan, southwest of Tripoli said pro-Gaddafi forces had fired about 50 Russian-made Grad rockets into the rebel-held town so far yesterday. The spokesman said the first salvo landed at about 6.45am.

He said NATO air strikes had destroyed at least two government helicopters near Zintan as they were being transported on trucks.

As the fighting has generally descended into a stalemate, the rebel Transitional National Council (TNC) says it needs up to $3bn to keep going in the coming months.

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 so far.

Clinton said Washington hoped to change the law to allow it to use some of the more than $30bn of frozen Libyan assets in the US to help the Libyan people.

“I’m pleased to announce the Obama administration, working with Congress, has decided to pursue legislation that would enable the US to tap some portion of those assets owned by Gaddafi and the Libyan government in the United States, so we can make those funds available to help the Libyan people,” she said.

As ministers gathered in Rome, Clinton said: “We’ll be discussing a financial mechanism, we’ll be discussing other forms of aid.”

But there was a cautious response from Britain, which said it had no plans to contribute to the new fund set up for the rebels because it had already made a “very substantial” contribution to humanitarian assistance.

So far, the rebels have been recognised by France, Italy and Qatar.

A rebel spokesman said yesterday that Denmark, Spain and the Netherlands had followed suit, but officials from those countries denied it.

Yesterday’s meeting brings together foreign ministers from more than 20 countries including France, Britain, the United States, Italy and Qatar as well as representatives of the Arab League and the African Union.

Picture: US secretary of state Hillary Clinton is greeted by Italy’s foreign minister Franco Frattini.Picture: AP