EU turns towards re-booting Ivory Coast economy

(LUXEMBOURG) - EU foreign ministers will offer Ivory Coast President Alassane Ouatarra a package of special economic aid Tuesday to rebuild the country after the violence prior to Laurent Gbagbo's capture.

The European Union will examine what it can offer to help stabilise the new regime in the world's top cocoa producer, after a four-month political crisis that saw the former French west African colony slip back towards civil war.

Even before Gbagbo's arrest on Monday, they had rescinded some of the sanctions imposed on the country in an effort to strangle Gbagbo financially and force him out of his bunker.

Following a request from Ouattara last week, the EU lifted sanctions on the ports of Abidjan and San Pedro as well as an oil company and the regulators of the country's vital cocoa and coffee industries.

Coffee and cocoa alone represent some 40 percent of Ivory Coast exports and about one fifth of national income.

A senior diplomat said the EU would consult with Ouattara's administration on lifting obstacles to other Ivorian companies.

"We will review the remaining sanctions in consultation with Ouattara's government and withdraw them as and when it is deemed appropriate," Nicholas Westcott, head of the EU diplomatic service's Africa office, told the EU Parliament's foreign affairs committee on Tuesday.

"But we will take action on that as swiftly as called for."

Other firms hit by sanctions included several banks as well as the national oil company Petroci, the APROCANCI association of rubber producers and SOGEPE electricity utility.

EU foreign affairs chief Catherine Ashton, attending talks otherwise focused on Libya, said the aim was to ensure the people of Ivory Coast are "able to have a peace, a future, their economy restored -- to get things if you like back to normal."

A senior EU diplomat, though, stressed it was "too early to give figures" for concrete financial aid, because "everything depends on what President Outtara asks of us."

The diplomat said it was "clear that the EU will intensify its aid" compared to what would have been expected in the normal run of things before the fighting broke out.

A Hungarian minister, speaking on behalf of the current EU chair in Budapest, said last week that a bundle of financial and institutional aid would be offered.

The European Comission's Humanitarian Aid and Civil Protection agency (ECHO) has already provided 30 million euros in aid.

But money is tight -- with ever-increasing demands on EU, and especially eurozone governments.

Quite apart from a third internal government debt bailout within a year, for Portugal, huge sums of money are to be mobilised to help north African Aran states Libya, Egypt and Tunisia.

The Ivory Coast, though, occupies a key position in west Africa -- and Europe wants to help it tackle accelerating inflation, unemployment and banking sector weaknesses, amongst others.

However, there is no blank cheque on offer -- not least with Ouattara's image weakened by accusations of involvement by troops loyal to him during a massacre in western Duekoue that saw hundreds of people killed according to western observers.

Foreign Affairs Council