EU Threatening Sanctions to Isolate Those Opposed to Unity Government; Libya’s Financial System Severely Strained

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A recent report issued by the UN’s Panel of Experts on Libya calls on Libya’s UN-brokered unity government, the Government of National Accord (GNA), to provide urgent oversight and protection for Libya’s financial system. According to the report, Islamic State is benefitting from Libya’s “political and security vacuum,” adding that the terrorist group’s control in Libya has expanded considerably. The panel highlights that Islamic State’s stream of attacks on Libya’s oil facilities and the activities of other armed groups have devastated the country’s economy. The report observes that Libya’s financial system faces an “no longer tenable” situation “weakened by the competition between the two rival governments over the control of state financial institutions.”

The EU has begun drafting the text for a new round of sanctions targeting high-level officials in Libya who are undermining the country’s new unity government, Reuters reports. The EU reportedly agreed last week to proscribe a number of individuals, including the president of the General National Congress in Tripoli, the prime minister of the Tripoli-based government, and the president of Libya’s internationally-recognized parliament. Libya’s Prime Minister-designate Fayez Seraj said the GNA’s move from Tunisia could take place in the coming days, as he and France’s foreign minister were set to meet last week to discuss political and military requirements to govern in Tripoli.

The divide between the internationally recognized government in Libya and the Libya Dawn forces that control Tripoli, is as deep as the political divides in other countries that experienced political transition during the Arab Spring. Threatening sanctions against both parties for not following external directions on peace talks may be tempting as a short term negotiating tactic, but the long term implications are unclear with respect to the eventual rehabilitation of Liyba’s economy and the urgent need to defeat the local chapters of ISIL, al Qaida and other jihadists.