A row between Switzerland and Libya, which began in 2008, has escalated in tit-for-tat fashion over the ensuing 20 months into a stand-off between the two countries that has drawn in the innocent citizens of almost two dozen uninvolved European Union member states. The latest twist in this increasingly bitter saga came with Libyan leader Muammar Gaddafi calling for a jihad, or holy war, against Switzerland, ironically a country long regarded as one of the most peaceful nations in the world.

Col Gaddafi's appeal for a holy war was, he said, a response to a Swiss referendum last November, which banned the construction of minarets or mosques in their country. "Any Muslim in any part of the world who works with Switzerland is an apostate, is against (the Prophet) Muhammed, God and the Koran," he said at a rally broadcast on television. He made the speech to mark the Prophet's birthday, ensuring that many Arabs would take the call seriously.

The Libyan leader made it clear that Switzerland, "an infidel, obscene state which is destroying mosques", was, at the very minimum, an ideological enemy while, at the same time, criticising Al-Qaeda, calling it a "psychological disease". "There is a big difference," he added, "between terrorism and jihad, which is a right to armed struggle".

Where does this latest escalation in Col Gaddafi's rhetoric, if not yet his actions, leave the EU and, more pertinently, Malta? As so often is the case on such matters, the EU is not united. Italy, France and Malta, which have very significant trade and business links with Libya, have asked the Swiss government to withdraw the visa blacklist against named Libyans, including Col Gaddafi's family. Malta and Italy went one step ahead and have questioned the legality of the Swiss action.

Malta's position is particularly sensitive. It would be extremely vulnerable to any action by Col Gaddafi, for example if the flow of illegal immigrants through the central Mediterranean were to resume following the lull of the past months. Moreover, Maltese nationals in Libya, including those with residence and work permits, have been directly affected. Malta exports millions of euros worth of goods and services to Libya annually. Although the Maltese government has adopted a policy of "business as usual", continuing to issue visas to Libyan nationals, it cannot overlook its position in the EU, nor that Col Gaddafi's declaration of jihad has been condemned by the United Nations, which it regards as "inadmissible" in diplomatic relations. Justice and Home Affairs Minister Carm Mifsud Bonnici noted that, although it must be taken within context, Col Gaddafi's warning could not be ignored.

Even though it may be tempting to see this episode as possibly another example of Col Gaddafi's reputation for posturing, it conceals a much shrewder reality about a figure who switches his ideological rhetoric to suit changed international circumstances. He is a master of that school of negotiation, where each response is ratcheted up until the overall objective is achieved.

While Malta must hope that the storm between Libya and Switzerland blows away, it cannot ignore either the reality - and vulnerability - of its geography or its membership of the EU. Thus, it must consider, with due discretion and care, what it does next, especially with regard to the planned visit of Col Gaddafi to Malta. No diplomatic stone should be left unturned and all intermediaries at one's disposal should be made good use of.

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