Gaddafi, Berlusconi sign accord worth billions

Italy has just given Libya a historic apology for decades of colonial rule over the North African nation. Along with the apology came $5 billion in compensation for colonial misdeeds. The compensation will be both in the form of direct payments and Italian investment in Libya, for example Italy will now fund the construction of an east-west highway across the country. Italian Prime Minister Silvio Berlusconi signed the historic accord in Tripoli, saying that it ended 40 years of misunderstanding between the two nations.

He added: "it is a complete and moral acknowledgement of the damage inflicted on Libya by Italy during the colonial era."

Berlusconi's move was a bold one for two reasons. First, European powers have been reluctant to acknowledge the toll their colonial rule took on large swaths of Africa and Asia, and even more reluctant to back up any apologies with compensation. Second, Italy is one of the first Western countries to invest heavily in Libya since that country renounced terrorism and their pursuit of nuclear weapons in 2003.

Muammar Gaddafi was once viewed in much the same way Saddam Hussein was for his funding of terrorist groups across the Middle East. But in recent years Gaddafi has tried to repair his image and set himself up as one of Africa's elder statesmen. This rehab project included payments for Libyan-funded terrorist acts (like the bombing of Pan Am flight 103 in 1988) and giving up a decades-long quest to build a nuclear bomb.

For their part, Italy hopes that better relations will mean that Libya will step up efforts to prevent illegal immigration to Europe (many of whom land in Italy), and will provide future business opportunities for Italian firms. Italy ruled Libya from 1911 until being driven out during World War II in 1943.