Will NATO go for half a loaf in Libya?

Kim Sengupta and Solomon Hughes have one of those exclusives in The Independent that’s an equal mixture of intriguing and dubious on the current situation in Libya.  Here’s the lead: 

The Libyan regime is preparing to make a fresh overture to the international community, offering concessions designed to end the bloodshed of the three-month-long civil war.

 

The Independent has obtained a copy of a letter from the country’s Prime Minister, Al-Baghdadi al-Mahmoudi, being sent to a number of foreign governments. It proposes an immediate ceasefire to be monitored by the United Nations and the African Union, unconditional talks with the opposition, amnesty for both sides in the conflict, and the drafting of a new constitution.

David Cameron and Barack Obama met yesterday to try to find an exit strategy from a conflict increasingly appearing to have no definitive military solution in sight. The US President acknowledged that the allies now seem to face a long, attritional campaign.

Reading through the whole story, I certainly believe that Libya sent out a cease-fire proposal.  What I don’t buy is the notion that various NATO countries are eager to accept such a deal.  That part seems much less clearly sourced. 

There’s also this interesting Financial Times story by Michael Peel and Sam Jones suggesting that Libya’s sovereign wealth fund has less money that previously anticipated: 

Libya lost billions of dollars on sophisticated financial products sold to Muammer Gaddafi’s sovereign wealth fund by some of the world’s leading financial institutions, according to a confidential Libyan government document.

Banks and hedge funds led by France’s Société Générale are named in about $5bn (£3bn) of deals involving the oil-rich nation, some of which had resulted in heavy losses by the middle of last year.

One of the most striking losses, outlined in an internal report for the Libyan Investment Authority, was a 98.5 per cent fall in the value of the sovereign wealth fund’s $1.2bn equity and currency derivatives portfolio….

The report for managers of Libya’s sovereign wealth fund, dated June 30 last year, said its bank and hedge fund investment products had fallen in value from about $5bn to roughly $3.5bn, out of the body’s total assets of $53.3bn.

This is an interesting strategic dilemma for NATO.  On the one hand accepting a cease-fire would potentially end an intervention that has lasted longer that top policymakers apparently expected.*  On the other hand, a cease-fire doesn’t exactly scream "geopolitical win."  There’s always an incentive to hold firm and count on the Gaddafi regime to crack. 

If you were Barack Obama, Nicolas Sarkozy, or David Cameron, which bet would you make?  A cease-fire now or rolling the dice for a more complete victory?