(Recasts after Libya accepts apology)
By Gavin Jones
ROME, May 9 (Reuters) - Libya accepted on Friday an apology from an Italian minister whose T-shirt offended Muslims in 2006, and withdrew threats of "repercussions" against Italy over the anti-immigrant party politician's inclusion in a new government.
Roberto Calderoli of the Northern League was named this week as a member of the new administration of Silvio Berlusconi, who was installed as prime minister for a third term.
A statement from the Libyan embassy in Rome said Libya noted "with satisfaction" the "public statement of regret" by Calderoli and, after further contacts with the Italian authorities, considered that "the case is closed".
Berlusconi, facing a diplomatic clash -- and possible energy sanctions -- after Libya made clear its anger at his choice of minister, said earlier he was "confident we will be able to clarify and calm down the situation with Libyan authorities".
Calderoli quit Berlusconi's last government in 2006 after wearing a T-shirt with a Danish cartoon of the Prophet Mohammad that angered Muslims worldwide. He was blamed for rioting that broke out at Italy's consulate in the Libyan city of Benghazi.
Libya had warned of "catastrophic consequences" if Calderoli became a minister again and reacted to his swearing-in on Thursday by saying it would no longer cooperate on preventing illegal immigrants from Africa landing on Italian shores.
The Libyan government was reported to be preparing sanctions against Italy such as shelving an agreement to extend the activities of Italian energy company ENI in Libya.
ANGRY RESPONSE
Returning as minister for "simplification" -- a new post without a full ministerial portfolio -- Calderoli was asked by Italian television about Libya's angry response to his appointment, and whether he regretted the T-shirt incident.
"Mine was a message of peace and rapprochement between the monotheistic religions but was misunderstood," he said. "I hope there aren't any problems today linked to something in the past that should be considered water under the bridge."
The Libyan embassy's statement said Calderoli had had further talks with the ambassador "during which he clarified the sense of the declarations he had already made to the media of the two countries."
New Foreign Minister Franco Frattini earlier on Friday called Libya "a friend" and said Italy "is committed to helping to develop those initiatives of strong collaboration with Europe that Libya wants."
Italy is Libya's main trading partner in Europe and ENI's Libyan assets are the subject of negotiations in the company's landmark cooperation deal with Russia's Gazprom.
Earlier on Friday Libya had demanded that Calderoli either step down or apologise for the 2006 episode.
"If the Italian government does not adopt one of these two options, it has to prepare itself for confronting the repercussions from its choice," the Gaddafi International Foundation said in a statement posted on its Web site.
The Foundation is chaired by Libyan leader Muammar Gaddafi's son Saif al-Islam, widely thought to play a major role in Libya's diplomacy with Western states.
Since the T-shirt incident, Calderoli has continued to offend Muslims in Italy by protesting at the construction of new mosques and threatening "pig day" protests to defile them. He once walked his own pet pig over a site intended for a mosque.
The Northern League, a long-standing ally of Berlusconi, is know for its vehement anti-immigrant rhetoric. The party made surprise gains in mid-April's election and was rewarded with four cabinet posts, including the Interior Ministry.
(Additional reporting by Stephen Brown and Lamine Ghanmi; Editing by Charles Dick) ((gavin.jones@reuters.com; +39 06 8522 4351; Reuters Messaging: stephen.brown.reuters.com@reuters.net))
Keywords: ITALY LIBYA/
(Adds details)
By Wojtek Dabrowski
TORONTO, May 9 (Reuters) - The Toronto Stock Exchange's main index finished in the red on Friday as profit-taking cooled the energy sector even though oil prices hit another record high.
The S&P/TSX composite index <.GSPTSE> dropped 86.80 points, or 0.59 percent, to close at 14,521.19.
"We had such a very good day yesterday and this market is still a very tricky market, so we probably ran into some profit-taking today," said John Kinsey, portfolio manager at Caldwell Securities Ltd. The index rose more than 200 points on Thursday.
Eight of the 10 main subgroups on the benchmark ended lower, including the key energy and materials sectors, which dropped 0.52 percent and 1.83 percent, respectively. Financials inched 0.06 percent lower.
The S&P/TSX 60 index of Canadian large-cap stocks lost 5.99 points, or 0.69 percent, to end at 863.46.
Oil shares fell even though crude jumped to a record high above $126 a barrel, extending its gains on fuel supply concerns and speculator buying.
Canadian Natural Resources Ltd <CNQ.TO> was among the energy companies that fell, losing C$1.85, or 1.9 percent, to C$94.15 a day after it reported a surge in quarterly profit because of rocketing oil prices.
Oil and gas powerhouse EnCana Corp <ECA.TO> fell 96 Canadian cents, or 1.1 percent, to end at C$86.52.
"The stocks are down for a change, they're not following their commodity," Kinsey said.
Gold prices moved higher on the back of oil on Friday -- an increase not reflected in the shares of gold producers such as Barrick Gold <ABX.TO>, which fell C$1.49, or 3.6 percent, to finish at C$39.51.
Among companies reporting results, ACE Aviation Holdings <ACEa.TO>, parent of airline Air Canada <ACa.TO>, posted a first-quarter loss on Friday because of one-time charges and said it would buy back about 42 percent of its stock. Its shares spiked C$1.41, or 7 percent, to C$21.46.
In the United States, the Dow Jones industrial average shed 120.90 points, or 0.94 percent, to close at 12,745.88. There, a dismal set of results from insurance behemoth American International Group <AIG.N> raised doubts that the end of the credit crisis was near. The tech-heavy Nasdaq moved lower by 5.72 points, or 0.23 percent, to 2,445.52.
($1=$1.02 Canadian) (Reporting by Wojtek Dabrowski; editing by Peter Galloway) ((wojtek.dabrowski@reuters.com; +1-416-941-8009; Reuters Messaging: wojtek.dabrowski.reuters.com@reuters.net)) Keywords: MARKETS CANADA STOCKS
By Tom Doggett
WASHINGTON, May 9 (Reuters) - Even though Iraq is attracting more foreign investment and will earn billions of dollars this year from oil exports, the country will still have to rely on the United States to help pay for its reconstruction costs, a top Iraqi government official said on Friday.
"We never have enough (money). To reconstruct Iraq will require $200 to $300 billion," Fawzi Al-Hariri, Iraq's minister of industry and minerals, told Reuters. "We will still need assistance from the U.S., there is no doubt we will."
In an interview following a speech to the U.S.-Arab Economic Forum in Washington, Hariri said the United States is spending billions of dollars on rebuilding Iraq "based on a U.S. decision that it's for its national security."
"We can't tell the U.S. government not to. We would welcome anything that is done," Hariri said. "It would make the experiment succeed," he said, apparently referring to the Bush administration's efforts to bring democracy to Iraq.
With oil prices forecast to stay above $100 a barrel for the rest of this year, some U.S. lawmakers have called on Iraq to pay for more of its reconstruction costs.
Iraq, which is a member of OPEC and has the world's third-biggest oil reserves, earned $38 billion in oil export revenue last year. For 2008, the country has already raked in $20 billion from oil shipments just through April, according to the U.S. Energy Department.
Hariri acknowledged that Iraq was earning more money from its oil and that the country should do a better job of allocating how it is spent. "We just need to be better at managing those revenues," he said.
He said Iraq could also more effectively coordinate reconstruction efforts with the United States "to make every dollar that is spent in Iraq a greater benefit than possibly it is at the moment." (Reporting by Tom Doggett, editing by Matthew Lewis) ((tom.doggett@thomsonreuters.com; + 1 202-898-8320; Reuters Messaging: tom.doggett.reuters.com@reuters.net)) Keywords: IRAQ OIL/REVENUE
(Adds details, comments, updated closing numbers)
By Wojtek Dabrowski
TORONTO, May 9 (Reuters) - The Toronto Stock Exchange's main index finished in the red on Friday as profit-taking cooled the energy sector even though oil prices hit another record high.
The S&P/TSX composite index <.GSPTSE> dropped 86.80 points, or 0.59 percent, to close at 14,521.19.
"We had such a very good day yesterday and this market is still a very tricky market, so we probably ran into some profit-taking today," said John Kinsey, portfolio manager at Caldwell Securities Ltd. The index rose more than 200 points on Thursday.
Eight of the 10 main subgroups on the benchmark ended lower, including the key energy and materials sectors, which dropped 0.52 percent and 1.83 percent, respectively. Financials inched 0.06 percent lower.
Oil shares fell even though crude jumped to a record high above $126 a barrel, extending its gains on fuel supply concerns and speculator buying.
Canadian Natural Resources Ltd <CNQ.TO> was among the energy companies that fell, losing C$1.85, or 1.9 percent, to C$94.15 a day after it reported a surge in quarterly profit because of rocketing oil prices.
Oil and gas powerhouse EnCana Corp <ECA.TO> fell 96 Canadian cents, or 1.1 percent, to end at C$86.52.
"The stocks are down for a change, they're not following their commodity," Kinsey said.
Gold prices moved higher on the back of oil on Friday -- an increase not reflected in the shares of gold producers such as Barrick Gold <ABX.TO>, which fell C$1.49, or 3.6 percent, to finish at C$39.51. ($1=$1.02 Canadian) (Reporting by Wojtek Dabrowski; editing by Peter Galloway) ((wojtek.dabrowski@reuters.com; +1-416-941-8009; Reuters Messaging: wojtek.dabrowski.reuters.com@reuters.net)) Keywords: MARKETS CANADA STOCKS
ROME, May 9 (Reuters) - Libya on Friday accepted an apology from a newly appointed Italian minister from an anti-immigrant party who wore a T-shirt that offended Muslims in 2006, and withdrew previous threats of "repercussions" against Italy.
Roberto Calderoli of the Northern League was named this week as a member of the new government of Silvio Berlusconi, who was installed as prime minister for a third term.
A statement from the Libyan embassy in Rome said Libya noted "with satisfaction" the "public statement of regret" by Calderoli and, after further contacts with the Italian authorities, considered that "the case is closed".
Berlusconi, facing a diplomatic clash -- and possible energy sanctions -- after Libya made clear its anger at his choice of minister, said earlier he was "confident we will be able to clarify and calm down the situation with Libyan authorities". ((Reporting by Gavin Jones; Editing by Alison Williams; Rome newsroom; gavin.jones@reuters.com; Phone: +39-06-8522-4232))
Keywords: ITALY LIBYA/APOLOGY
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