Libya Flips Over Swiss Detention

Not since Napoleon's army occupied the country in 1798 has Switzerland had so much trouble from a foreign power.

A nation accustomed to being a peacemaker or onlooker in international conflicts is now in a political imbroglio of unprecedented proportions, sparked by the arrest of Col. Mummar el-Gaddafi's son Hannibal in Geneva last week.

Hannibal, 32, and his pregnant wife Aline were arrested on July 15 after the staff of a five-star hotel notified the police that the couple was beating two servants who were part of their entourage. Questioned by the police, a Tunisian woman and a Moroccan man confirmed that the Gaddafis had repeatedly struck them, causing visible bruises and other bodily injuries. Two days later, the Gaddafis were released on $500,000 bail and, pending further investigation by the Geneva prosecutors, returned to Libya. "They deny all the charges against them," the couple's Geneva attorney, Alain Berger, told TIME.

Meanwhile, the Gaddafis' two-day detention stoked the fires of rage back in Libya. Hannibal's sister Aicha warned the Swiss authorities that her brother's arrest would be countered with "an eye for an eye, a tooth for a tooth" retaliatory measures.

She was not bluffing. Within days, as throngs rioted in front of Switzerland's embassy in Tripoli, the Libyan government shut down local subsidiaries of Swiss companies Nestlé and ABB, arrested two Swiss citizens, canceled most flights to Switzerland, and, on Thursday afternoon, announced that all Swiss-bound oil exports will be stopped until charges against the Gaddafis are dropped and the Swiss offer their apologies.

"These are disproportionate measures coming from an autocratic ruler who protects his family," says Daniel Moeckli, a Middle East expert at the Center for Security Studies in Zurich. "Obviously, that is not a democracy." As for the threat of an oil embargo, "I am skeptical that the Libyans would carry it out," says Rolf Hartl, managing director of Swiss Oil Association, noting that Libya delivers 49% of Switzerland's supply of crude oil and owns one of the country's two refineries; those business ventures yield annual revenue of between $2 and $3 billion. "I believe they will calm down eventually, come to their senses and see what's at stake. Cutting off our oil supply would be like shooting themselves in the foot."

Not all experts agree. "The Libyans are stupid enough to act irrationally," says Conrad Gerber, president of Petro-Logistics, a Geneva oil consultancy firm. "They produce 1.7 million barrels a day, yielding billions of dollars, so the small Swiss market is a drop in a bucket for them."

The two experts agree on one point: should Libya definitely halt its oil delivery, Switzerland's supply will not suffer, and the price per gallon will not increase. Hartl says the country has sufficient reserves to last four and a half months — "enough time to find other sources, such as African and central Asian countries." Meanwhile, a hastily arranged Swiss delegation headed by Foreign Affairs Minister Micheline Calmy-Rey was dispatched to Tripoli yesterday to keep the crisis from escalating further. Given the ire in Libya, that might be one of the toughest tests of diplomacy the normally unctuous Swiss have ever faced.