Editor's Note:This is the third installment in a five-part series publishing in the next few days that will examine the motives and mindset behind current European intervention in Libya. We began with an overview and follow with an examination of the positions put forth by the United Kingdom, France, Italy, Germany, Russia and Spain. Italian jets operating over Libya on March 22 managed to jam Libyan air defense radar networks "without firing a single shot," according to an Italian Air Force announcement. That Italy emphasized its abstention from opening fire on Libyan forces is not coincidental; it is part of Rome's strategy of hedging its role in the Libyan intervention — being involved in the ongoing U.S.-European intervention in Libya without actually attacking the troops of its once close ally, Moammar Gadhafi. Italy has far "more to lose," STRATFOR's Italian sources keep stressing, than anyone else involved in the U.S.-European coalition. Italy's business, energy and national security interests are directly impacted by the fate of Libya. (click here to enlarge image) For this reason, Italy sought to hedge its policy toward Gadhafi throughout the run-up to the intervention. Rome initially took a line very close to that of Tripoli, with Frattini voicing concerns Feb. 21 over the "self-proclamation of the so-called Islamic Emirate of Benghazi," echoing a statement from Gadhafi's son, Seif al-Islam, issued the previous day to describe the rebels in eastern Libya. While Italy now supports the coalition against Gadhafi, offering the use of seven Italian airbases to coalition aircraft and having the Italian air force conduct patrols over Libyan airspace, Rome continues to hedge its policy. Frattini on March 21 said Italy would have to resume control of its airbases, thus hinting it would kick out foreign troops, if some sort of NATO coordination structure were not agreed upon (an agreement on a NATO coordination structure was reached by March 28). In fact, despite participating in the intervention, Rome has gone as far as to emphasize that its jets operating over Libya had managed to jam Libyan air defense radar networks "without firing a single shot," according to an Italian Air Force announcement on March 22. Rome's insistence that it is both part of the intervention and has abstained from playing an aggressive role against Gadhafi is a strategy intended to allow Italy to continue to balance the rebels in the east with Gadhafi in the west of the country. Rome simply has too many interests in Libya to pick one side and stick with it. NATO command-and-control structures are important to Rome, which does not want the Libyan intervention to remain a Paris-London affair when the United States withdraws from leading the operations, leaving Italy's energy and security interests at the mercy of two countries looking to gain the upper hand in a post-Gadhafi Libya. This explains Rome's reluctance to allow France to lead a command structure concurrent with NATO's. Rome simply does not trust Paris or London, both of whom have plenty of reasons to expand energy and business interests once rebels grateful to both for leading the charge in Libya assume power in the eastern part of the country. Rebel leaders themselves have stressed that economic ties "will be calibrated to reflect the support that the various European countries have offered the grasroots uprising," as the Libyan National Transition Council Deputy Chairman Hafiz al-Ghogha said in a response to a question what is in store in the future for Italy's business and energy interests in Libya. These sort of statements are what Rome fears the most. As a response, the press in Italy has claimed that Rome was seeking an official NATO role in the intervention so as to prevent French-U.K. "activism." In fact, one can directly draw a parallel between the competing interests of Italy, France and the United Kingdom in the intervention in Libya today with the competing interests of the three during the colonial 19th-century Scramble for Africa.
Italian Interests in Libya
Geographically, Italy is one of the closest European country to Libya, with the island of Lampedusa, a destination of choice for migrants fleeing North African unrest, only 225 kilometers (140 miles) from Libya. It shares deeper ties with Libya than the rest of Europe, given its former colonial relationship. Like Germany, Italy became a unified European power only in the late 19th century and entered the scramble for African colonies after France and the United Kingdom had taken the choicest spots. The desolate stretch of North Africa just south of Sicily was still available, so Italy began building a sphere of influence in what is now Libya but was then three separate states: Tripolitania, Cyrenaica and Fezzan. Italy invaded in 1911, but resistance by insurgents in Cyrenaica (today's eastern Libya) lasted until the 1930s. Italy lost its North African colony after World War II. Because of its geographic proximity and knowledge of local conditions, Italy has not shied from conducting business in Libya in the post-World War II era. Energy company ENI began operating there in 1959 and never left the country, even when the rest of the West rebuffed Gadhafi in the 1980s due to his association with terrorism. This commitment to Libya allowed Rome to negotiate lucrative energy and arms contracts once Gadhafi renounced terrorism in 2003. Today, Libya accounts for some 15 percent of ENI's total global hydrocarbons output, with oil production of 108,000 barrels per day and natural gas production of 8.1 billion cubic meters in 2009. (click here to enlarge image) ENI has a number of key energy assets in Libya, starting with the Greenstream pipeline in the west, which supplies Italy with around 15 percent of its natural gas imports. ENI operates the pipeline, which cost around $6.6 billion to build. It has been shut down due to the unrest, however, prompting Italy to turn to Russia for natural gas to compensate for the difference. If this situation persists, it will further entrench Rome's dependence on Moscow for natural gas. Throughout the crisis, ENI has stressed that it has not shut down its natural gas production in Libya in order to provide Libyans with energy. ENI also has stakes in a number of lucrative oil-producing concessions, including the Bouri oil field, the largest offshore field in the Mediterranean Sea, located immediately off the coast of Tripoli, and the Wafa and Elephant oil fields in west and southwestern Libya, respectively. While ENI also had producing assets in eastern Libya, an overview of its assets illustrates that the majority of them, and the most lucrative ones, are in fact in the west in what is still government-controlled territory. (click here to enlarge image) Italy has also been one of Gadhafi's major arms suppliers since an EU arms embargo was lifted in 2004, a step for which Italy strongly lobbied. Italy has delivered on approximately $500 million worth of deals since 2004, slightly less than the value of French military deliveries. Taking into account that overall Italian military sales were approximately a quarter of French sales in 2009, deals with Libya represent a larger percent of total sales for Rome. Furthermore, Italy was in the process of negotiating a $1.05 billion-worth of military contracts before the unrest began. This included a large border security and control system deal with Finmeccanica for $300 million and negotiations for shipbuilding contracts worth $600 million with Intermarine Spa. The flow of capital and investments is not one-sided; Libya's sovereign wealth fund has invested in a number of Italian financial and industrial enterprises. Libya's sovereign wealth fund owns about 1 percent of ENI, and had stated its intent to increase its stake to 10 percent; 7.2 percent of UniCredit, Italy's biggest bank; and 2 percent of weapons manufacturer Finmeccanica. Rome fears Gadhafi could withdraw these investments from Italy — something Gadhafi has threatened — or that a new government in Libya might decide to invest in Paris and London instead. (click here to enlarge image) Libya is also an issue of national security for Rome because of immigration. In 2008 alone, up to 40,000 migrants tried to enter Italy illegally via Libya, with 15 percent trying to land on Sicily or Lampedusa directly, according to Rome. Gadhafi himself initiated the increase in immigration by turning away from Pan-Arabism in 1990 towards Pan-Africanism, relaxing visa policies for sub-Saharan African countries and allowing Libya to become a transit state for migrants to Europe. He then parlayed this problem into a negotiating advantage with Rome. Tripoli and Rome signed a 2008 friendship treaty — which incidentally had a non-aggression clause now no longer in effect as Rome has suspended the treaty — that in return for Italian investments in Libya gave Rome assurances that Tripoli would stem the flow of migrants. This has included Libyan acquiescence in Italy's "push-back" policy, which involves intercepting refugees and migrants in international waters and repatriating them to Libya regardless of whether they are Libyan. The policy has drawn condemnation from human rights and refugee groups, but has largely ended the flow of migrants into Italy.
Acceptable Exit Strategies
Italy has therefore enjoyed a privileged relationship with Gadhafi, from energy to weapons sales to its being a main destination for Gadhafi's investments. The cozy business relationship has allowed Rome to negotiate a deal on securing its seas from an unchecked influx of migrants, both a national security and domestic political issue. Since January, when the Tunisian upheaval kicked off the unrest in the Arab world, 19,000 migrants — including 2,000 Somalis and Ethiopians — have landed on Lampedusa. This has largely confirmed Rome's fears that the general unrest in North Africa — combined with the destabilization of Libya — would lead to an exodus of North and sub-Saharan Africans to Italy. The current situation carries many risks for Italy. Replacing Gadhafi with an unknown regime or unstable environment that resembles the tribal warlordism of Somalia would lead to unchecked migration flows — which is essentially already happening — and an insecure business environment. His replacement with a rebel leadership grateful to London and Paris but suspicious of Rome also would threaten Italian interests. But participating in the coalition is risky, too, as Gadhafi could wind up clinging to power and deciding to seek revenge against Italy for joining forces with the United States, France and United Kingdom against him despite the 2008 friendship treaty. Moreover, the European coalition allies do not trust each other. Rome believes that London and Paris are undermining Italy's long-held upper hand in Libya. Italy wants to ensure its influence in how a post-intervention Libya is run and therefore has fought to move the coalition toward a NATO command-and-control structure that would be headquartered in Naples — allowing Rome to keep a close eye on the operations' details. Because its European neighbors seem unwilling to deal the finishing blows to the Gadhafi regime — at least as of this moment — Rome must take into account the possibility that Gadhafi could remain in power, if only in the western portion of Libya. Italy is therefore walking a tightrope: It can stand neither with Gadhafi nor too aggressively against him. Rome therefore has to be part of the coalition so as not to be frozen out of Libya by a new regime in the event Gadhafi is eliminated; however, its participation in the coalition has to be conducted in a halting manner to minimize the risks to its energy assets in western Libya should Gadhafi survive. Rome is jockeying to play the role of peacemaker by participating in the coalition while not seeming overly eager to oust Gadhafi, currying favor with both the coalition and Gadhafi. To this end, Italy has sought, and has received, command over the NATO naval operation to embargo Tripoli's access to arms, potentially a beneficial command if Rome wants to have power over Gadhafi in the near future. It has in the meantime maintained a non-aggressive role in the intervention so that it can claim to Gadhafi that its intentions from the beginning were to be a voice of reason in the intervention. Rome will attempt to use both its links to the Gadhafi regime and its role in the intervention to carve out a post-conflict mediator role that can protect its interests. The problem with Italy's plan is both the fluidity of the situation and the fact that it's ability to continue hedging its role is being reduced every day London and Paris endear themselves to the rebels and as Gadhafi becomes more indignant toward Western powers. Ultimately, it is difficult to see Italy being completely frozen out of Libya. Geographic proximity and a long history of involvement means Rome, from Carthage to Libya, always has had a hand in the affairs of North Africa. The question in Rome today is how profitable that influence will be. Next:Russia and Germany have been the most vociferous in their opposition to the intervention. We will examine how these countries have played a role in the Libyan intervention.