Switzerland feels the heat in scandal of Qadafi's son

In Europe, the scandal at the centre of the affair is almost commonplace; in Libya it's seen as a subject that should not be publicised because Col Qadafi's son is involved.

What started as a minor diplomatic row between Libya and Switzerland almost two years ago has escalated into a serious dispute, prompting some EU countries to try to break the deadlock to avoid long-term consequences. The climax came on February 25 when Colonel Muammar Qadafi called for jihad. Speaking before thousands of Muslims from 20 different countries, including a dozen heads of states, he said Switzerland is an "infidel and obscene state which destroys mosques".

On March 2 the Libyan foreign minister, Musa Kusa, gave the first official account of events that had sent the two countries' relations into free fall since August 2008. Speaking at the annual General People's Congress's session on live television, Mr Kusa presented a detailed, although sometimes ambiguous, sequence of events. The presentation appeared to be a PR effort to influence Libyans and explain how events had got out of hand, and why the government had reacted so strongly. Without actually naming Hannibal, Col Qadafi's son, Mr Kusa's official account did state for the first time that "the leader [Col Qadafi] told us as negotiators that he does not mind that his son abides by the law if only the Swiss explain why such force was used in such manner". Of course, he was referring to the arrest of Hannibal and his wife in Geneva hotel in 2008 on charges of abusing two domestic servants.

Mr Kusa also disputed the Swiss authorities' investigation into the incident, calling it "less than serious" because of its narrow focus. In a piece of theatrics, he waved the Swiss list of personae non grata and read out some names, which included the Qadafi family and the entire Libyan cabinet, as well as officials in the oil and gas industry. By last Thursday, there had been a couple of anti-Swiss demonstrations in three different cities, including about 4,000 students demonstrating outside the Swiss Embassy compound in Tripoli. Encouraged by the authorities, the demonstrations appeared to further pressure Switzerland ahead of possible mediation. On Friday, the situation got even worse when Libya announced a full economic and trade embargo against Switzerland.

A week before, a Tripoli-based ambassador from an EU country told me that the situation was likely to "overheat". Since Switzerland joined the Schengen visa system in December 2008, the Swiss seemed to have used the treaty as a weapon against Libyan visa requests. The ambassador said that on various occasions the Swiss seemed to play games with Libyans applying for visas, particularly targeting requests submitted to France, Portugal and Spain.

Many EU officials in Tripoli appear to be unhappy with the Swiss. In the words of my source, ambassadors even told their Swiss counterparts during a recent meeting that "Libya is more important to us than Switzerland" and "Switzerland should not use the Schengen visa as a tool to settle scores with Libya". On February 22, EU ambassadors in Tripoli managed to avert a nasty development by persuading the Swiss Embassy to give up two Swiss citizens, Max Göldi and Rachid Hamdani, sheltering in its compound. The two businessmen left the embassy just ahead of Libya's ultimatum that it would take "stronger measures" by noon that day. Mr Göldi was taken to Ajdiada prison, just outside Tripoli, to serve a four-month sentence for business law violations, while Mr Hamdani was taken to hospital for a medical check up.

Interestingly, Mr Hamdani was quoted in Quryna, a Libyan daily, implicating his own government in his ordeal. He told the paper: the "Swiss government got me involved in sheltering in the Swiss Embassy in Tripoli and this only complicated the situation." He seemed to vindicate Libya by saying: "I'll never forget the good hospitality and good memories I had." Mr Hamdani also blamed western media for "misreporting his case", and major outlets did make some factual errors about the case.

The same day as Mr Kusa gave the official explanation, the man at the centre of it all, Hannibal Qadafi, visited Mr Göldi in jail to express his "solidarity" with him according to Libyan TV news. Public opinion in Libya seems to support the government. Many ordinary Libyans see the Swiss actions as "humiliating", while some analysts nurture farfetched conspiracy theories that Libya singled out Switzerland as a weak European country as further revenge for the aftermath of the Lockerbie bombing.

In Europe, the scandal at the centre of the affair is almost commonplace; in Libya, however, it's seen as a taboo subject that should not be publicised because Col Qadafi's son is involved. It points to differences in understandings of the rule of law, transparency and the very idea of freedom between Europe and a rather tribal Libyan society. A settlement requires mediation led by Spain, Italy, Portugal and Malta, which were expecting a state visit by Col Qadafi, unlikely now given the latest escalation. In such a row, national interests are the cornerstone of any breakthrough. It's clear that many leading EU countries' economic ties with Libya weigh heavily on their decision. It's also worth remembering that many EU countries are already angry at Switzerland for its tax haven practices.

EU sources in Libya even consider recommending their governments to expel Switzerland from Schengen. However farfetched that seems to be, the Libyan oil and gas exports to many EU countries are a crucial factor in any EU collective action. Mustafa Fetouri is an academic and analyst based in Tripoli