Introduction to International Politics
Foreign Event Analysis
| Locale | ![[]](http://www.kvasaheim.com/flags/flag15-ly.png "Flag of Libya") | Libya |
|---|---|---|
| Title |
Will No Tamoil Mean New Turmoil for Swiss?
| |
| Summary |
Libya has withdrawn assets from Swiss banks and halted oil sales to the country in protest of what an unnamed foreign ministry official called, “poor treatment of Libyan diplomats and businessmen.” Tensions grew between the states in July, when the youngest son of Libya’s de facto leader, Muammar Gaddafi, was arrested in a Geneva hotel. Hannibal Gaddafi and his wife were accused of assaulting two members of their staff, but charges were dropped after the employees received undisclosed compensation. Libya had threatened to cut oil sales in July, after the initial incident took place. The Libyan oil company Tamoil claims to hold more than 300 gas stations in Switzerland, as well as account for 20 percent of the country’s oil supply. Tamoil CEO Issam Zanati said Thursday of the halted sales, “it is a decision of Libya and not of Tamoil.”
| |
| Analysis |
Libya’s announcement Thursday did not come as a surprise to Switzerland, as Gaddafi had earlier threatened to halt sales to the. However, there has been little word from Switzerland about how badly the measures taken by Libya will affect them. The removal of assets from bank accounts amounted to more than 7 billion dollars, say Libyan officials. The Swiss maintain that they have not received official word of the withdrawal, and accordingly have stayed quiet regarding the matter. The lack of Swiss response to this petty action by Libya is consistent with their famously neutral policy maintained for years. Moreover, the lack of communication between the two states indicates breakdown in diplomacy, a tenet of liberalism.
Rolf Hartl, the head of the Swiss oil companies association, said that prices and supply would not be affected, because distributors would have “ample time” to find new suppliers. However, Tamoil does provide one fifth of Switzerland’s oil, while operating a sizeable number of gas stations. This interdependence might possibly have a greater effect than the Swiss are letting on. While the Swiss economy was recently ranked second most competitive worldwide, the oil cuts could still come as an equalizing blow as the rest of Europe suffers economic decline and higher oil prices.
Gaddafi’s suspension of oil trading with Switzerland, and subsequent withdrawal of assets, are indications of an imbalance of power. Gaddafi is essentially checking the power of Switzerland by halting oil trade. Additionally, Switzerland does not seem to want to compromise either. The two countries had a mutually beneficial relationship in that Libya had a large buyer for her oil, while Switzerland had a steady supplier who was also putting money into the Swiss economy. The leaders of both countries must mediate the situation, as this will not bode well for either as economies worldwide continue the downward slide. | |
| Perspective |  | Liberal |
| In-Region URL | ||
| Out-of-Region URL | ||
| Submitted | October 10, 2008 at 11:30 am | |
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