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Show 2UA The Sail Lake Tribune, Sundav, Januarv 12, I'Wh Italy Walking on Egg Shells Over Call for Sanctions Against Libya By Marc Duvoib'n Newspapers ROME In an attempl to balance the demands of its most powerful ally against its own diplomatic and economic interests. Italy is moving cautiously toward some kind of economic sanctions against the Libyan regime of Moammar Khadafy. But officials here warn that it will be difficult for Italy to curtail its extensive and mutually lucrative corn mercial ties w ith its former colony Not only is the Libyan government Italy's principal supplier of crude oil sharebut it is also the second-larges- t holder in the automaker Fiat Italy's largest private company, and it recently acquired a majority interest in Tamoil. a leading Italian oil refiner and retailer. Italy is Libya s largest trading Knight-Kidde- I otf a I tu partner among Western nations and its leading supplier of arms, after the Soviet I'mon. On Thursday, however, the Italian government halted exports of "particularly dangerous" weapons to the North African country and said that no Italian workers would be allowed to take jobs abandoned by Americans now working in Libya, An estimated 15.000 Italians live and work in Libya oil company is Italys a major investor in several projects in Libya including an effort to exploit the Bouri field, believed to the largest deposit in the Mediterranean "An economic battle with Libya is very dangerous for us." I'go Intim. a member of Parliament from Prime Minister Bettino Craxis Socialist Party, said last week. "I think it is a mistake to act alone and in a hurry." government would impose Us own sanctions only as part of collective action by members of the European Economic Community. But by late last week, they indicated that they President Keagan s repeated iuIis for economic sanctions against Libya have caused anguish for Craxi and other leaders of Italy's governing coalition Italian leaders agree with Reagan that Khadafy has aided terrorists -including the Palestinians who attacked airports in Home and Vienna. Austria, last month, killing 15 bystanders and injuring more than 1 1U - and they want badly to join Washington in responding firmly to such behavior. At the same time, however, they w ant to avoid offending the moderate Arab regimes and Palestinian groups with which Italy has carefully culti vated good relations and which arc perceived to be one of the keys to a negotiated settlement of the conflict. Italian officials have said that the five-part- state-owne- off-sho- y believed some unilateral action against Libya was warranted. After a cabinet meeting Thursday, Craxi said he had "grave suspicions" that Libya had given support to Abu Nidals organization, an extremist Palestinian group believed to be responsible for the airport assaults. Previously, the Italian government h2d taken the position that the I'mted States had not proved its assertion of Libyan involvement. At that meeting, the cabinet also voted to develop "rigorous criteria" for Italian arms sales to Libya. Italy has not entered into any arms agreements with Libya since 1981, but it has continued to supply aircraft, mis Arab-Js-rae- The analyst said, however, that lucrative investments by Italian com panics probably constituted a more important reason behind Italy s hesitancy to disrupt economic relation with Libya Italian construction firms, which represent a powerful national lobby have done substantial business in Libya. building port facilities, oil refineries and other projects. About 40 Ital ian companies are participating in projects worth a total of $720 million Another important consideration from the Italian standpoint, the embassy analyst said, is that Libya owes about $700 million to Italian compa mes that entered into contracts with the Khadafy regime. Libya has been slowly repaying the debt under an arrangement in which it gives limited amounts of crude oil to Italy to sell on the open market. armored vehicles and other equipment under existing contracts. Although the volume of Italian trade with Libya has dropped olf in recent years, largely because the worldwide oil glut has depressed the Libyan economy, the rdationship remains an important one for both countries. siles. In 1984. the most recent year for which complete figures are available. Italy spent $2.5 billion on Liby an goods, mainly oil. and sold $1 8 billion in exports to Libya. Italy bought nearly nine million tons of crude oil and petroleum products from Libya in 1984. An economic analyst in a Western embassy here said that although Italy could easily find other sources for oil in the current buyer's market, Libyan crude is exceptionally pure and easy to refine. lor Crash of Jet Kills 5 In Colorado A private GRANBY, Colo (L'Ph executive jet crashed Saturday while trying to land in heavy fog at a small airport in the snowy Colorado Rockies. killing five of the six people aboard. The only survivor, whose name was not available, was airlifted to St Anthony s Central Hospital in Denver about 9U miles southeast, a spokeswoman with the Grand County Sheriff's Department said. A nursing supervisor said he was critically injured. "He s out of surgery and that's all I can tell you now," the supervisor said. Sheriff's dispatcher Kathy Jameson said investigators determined that fog was a "definite factor" in the crash of the Cessna Conquest. The jet crashed at 10 4U a m. MST as it tried to land, said George Baker of the National Transportation Safety-Boartwin-engin- FR e The five who died apparently were killed instantly. Baker said. The dead included pilot Pat Gettle of Silver-creek- , Colo., and her husband. Willard "Bud Gettle. one of the original ow of the Silvercreek ski resort Baker said heavy ground fog was reported in the area at the time of the crash "The crash occurred 40U yards south of the runway at the Granby airport and was reported to us at 10 minutes to 11." Jameson said. The airport is on a hill and not easily seen, even when the weather is clear. Jameson said She said the pilot was in radio contact with the ground shortly before crashing. "It's not a manned airport, just a very small facility for private pilots in the area. When Silvercreek knows there is a plane coming in. someone w ill go up there." she said. 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