Swiss president faces calls to resign in Libya row (AP)

GENEVA – Switzerland's president faced growing pressure to resign Tuesday, as the government failed to secure the release of two citizens detained in Libya since the arrest of Moammar Gadhafi's son in Geneva last year..

Figures across the political spectrum accused President Hans-Rudolf Merz of bungling negotiations with Libya as the deadline for the men's release passed at midnight..

"This is clearly a debacle, because promises were made and not kept," lawmaker Kathy Ricklin of the centrist Christian Democrats told state-owned radio DRS. "I think he should finish his presidential year, but then I expect his party to make a change.".

Her view was mild compare to calls from the nationalist People's Party and the left-wing Social Democrats for Merz's immediate resignation..

Switzerland's largest-selling newspaper Blick mocked the president by declaring "Merz loses face," which the president himself said would happen if he couldn't free the men by Sept. 1..

The president's office responded by saying Merz had no intention of resigning and lashed out at Libya for failing to keep its side of a bargain brokered last month to restore normal relations..

The accord signed by Merz and Libyan Prime Minister al-Baghdadi Ali al-Mahmoudi in Tripoli commissioned an independent panel to examine Gadhafi's arrest and possibly recommend compensation..

"The two Swiss were unable to leave Libya by midnight Monday, despite written assurances to this effect by the Libyan prime minister," said Merz's spokesman Roland Meier..

Libya also failed to appoint one of three judges to the arbitration tribunal by the deadline, Meier said..

Calls to Libya's embassy in Bern went unanswered, but Deputy Foreign Minister Khaled Kaiym said Monday the Swiss men must pay a fine for violating immigration rules before being released..

The two businessmen, Max Goeldi and Rachid Hamdani, were detained July 19, 2008, four days after Hannibal Gadhafi and his wife were arrested in a Geneva luxury hotel for allegedly beating up two of their servants. Libya recalled some of its diplomats from Switzerland, suspended visas for Swiss citizens, withdrew funds from Swiss banks, and reduced flights to the Alpine country in retaliation..

The servants withdrew their complaint after receiving compensation from an undisclosed source, but Tripoli cut off supplies of crude oil to a Libyan-owned refinery in Switzerland. Libyan officials have demanded wide-ranging concessions from Switzerland in return for the release of Goeldi and Hamdani, who have been described as "hostages" by Swiss media and government officials..

According to respected Swiss weekly NZZ am Sonntag, Libya wanted Switzerland to suspend three Geneva police officers involved in the arrest, declare their actions "illegal" and pay euro20 million ($29 million) in damages to Gadhafi..

During his visit to Tripoli on Aug. 20, Merz apologized for the arrest and signed what appeared to be a final agreement to resolve the two countries' differences..

The apology enraged many in Switzerland..

"We've seen how Clinton did it and how Sarkozy dealt with the Bulgarians," said Oskar Freysinger, a People's Party lawmaker, referring to ex-President Bill Clinton's talks to free two American journalists in North Korea and the efforts of French President Nicolas Sarkozy and his ex-wife Cecilia to free jailed medics in Libya..

"What is (Merz) doing excusing himself to a dictator and then creating a tribunal where we can only lose?" he asked..

Freysinger told The Associated Press that Merz should step down regardless of whether the businessmen return..

Merz's apology has angered the Swiss — and not only because of lost pride. In a country that cherishes small government and wide self-rule for individual cantons, the president's actions were seen as cutting into the autonomy of Geneva authorities..

The Libya accord comes on the heels of an equally contentious deal that Merz's government sealed with the United States to end a tax evasion standoff over American clients of the Swiss bank UBS AG. In that agreement, Merz largely sacrificed the sacred cow of Swiss banking secrecy by agreeing to hand over 4,450 names of Americans believed to have dodged the Internal Revenue Service, despite some complaints that the agreement violates Swiss law..

The pact with Libya has reinforced the idea that Switzerland can be coerced by more powerful countries..

"Would you trust this man?" Blick asked on a recent cover, with an arrow pointed to a triumphant-looking Moammar Gadhafi. "Merz did!".

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Associated Press Writer Onna Coray in Zurich contributed to this report.

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