As a gesture of solidarity with President Reagan's call for the isolation of Libya, the Italian government today halted exports of "particularly dangerous" weapons to the North African country and said that no Italian workers would be allowed to take up jobs abandoned by Americans now working in Libya.
The measures, taken during a meeting of Prime Minister Bettino Craxi's Cabinet today, came far short of the sort of collective economic sanctions President Reagan urged his European allies to adopt in his television broadcast Tuesday night.
In announcing the Cabinet's decision today, Foreign Minister Giulio Andreotti said that any further steps Italy might take against Libya, its former colony, would depend on the joint decision of the 12-nation European Community. Many of the organization's most important members -- including Britain, West Germany and France -- have already expressed unwillingness to apply economic sanctions against Libya.
In Italy's initial reaction to Reagan's call for the isolation of Libya because of its support of international terrorism, Andreotti said yesterday that he was calling for an emergency meeting of the community's foreign ministers to discuss the feasibility of joint measures against Libya. Andreotti said more proof would be needed that Libya was responsible for the Dec. 27 terrorist attacks on the Rome and Vienna airports.
While the European discussion takes place, Andreotti said, however, "it is clear that we will not export particularly dangerous weapons to Libya , nor, as I think is correct, Italian personnel will not replace Americans who must leave Libya."
Andreotti pointed out, however, that since 1981 Italy has signed no new arms contracts with Libya and that any Italian weapons the Libyans are now receiving had been sold under pre-1981 contracts. Italy had been second only to the Soviet Union as Libya's biggest arms supplier.
Italian officials have said that while Rome is not opposed to sanctions in principle, it believes they can only be effective if applied by all nations of the European Community, not just a few.
U.S. officials here said privately that this approach is sure to doom any hope of imposing effective sanctions against Libya, because they can have almost no impact without Italy, Libya's leading trading partner, and the likelihood of the EC agreeing to a joint strategy is, as one western diplomat here said, "just about nil."
Andreotti spoke with extreme caution of the "Libyan question," insisting that the European Community must discuss with "great responsibility" not only Reagan's request for the isolation of Libya but also the whole Middle East question from which it stems.
Andreotti stressed that the EC ministers must seek common initiatives for Middle East peace, adding, "one does not minimize condemnation and horror of terrorism without recognition that the problem is political in nature and that if not resolved the battle against terrorism will not be helped."
"It is hard enough to get the Common Market to agree on simple things such as butter and wine," grumbled one U.S. diplomat here who insisted on anonymity, "but to talk of something as monumental as Libya or the more intangible Middle East question and try to get some meaningful policy from that is all but impossible."
In Vienna, Italian Interior Minister Oscar Scalfaro and his Austrian counterpart, Karl Blecha, announced an agreement to exchange information on terrorist activities, Reuter reported. In a joint news conference, Blecha, whose country has refused to participate in sanctions against Libya, said Austrian officials "have no information that Libya was involved (in the Vienna airport attack). The two surviving gunmen, who were asked concretely and repeatedly about Libya, said in depositions they had not been in Libya and had not been trained there."
The decision to show even limited solidarity with Reagan was viewed here as a victory by Craxi, the Socialist prime minister, over Andreotti, the Christian Democratic foreign minister who apparently wanted Italy to take no action unless in concert with its European allies. According to government officials here, Craxi was bitterly stung by U.S. accusations of being soft on terrorism in the aftermath of the Achille Lauro cruise ship hijacking last October.
Italy's participation in any effort to isolate Libya is critical. It is Libya's chief trading partner and the estimated 13,000 Italians who still live and work there play important roles in everything from running the harbor at Tripoli to keeping the country's key petroleum industry operating.
But just as Libya would find it difficult to exist without the 30 percent of its imports that come from Italy, the Libyan market is Italy's 10th-largest customer. In 1984 the two nations did $4.7 billion worth of business, most of it in Libyan oil exports to Italy.
Libyan investment in Italy is as important a factor. Libya has sunk millions of dollars into Italian companies, including a 13.5 percent share of the Fiat auto-making empire. A week ago it was learned that the Libyan Arab Foreign Bank had taken over an Italian-based oil company, Tamoil, that has an important refinery in Cremona and a string of gasoline distributorships throughout Italy.
In addition, the Libyan government owes from $600 million to $800 million to about 50 Italian companies for work done in Libya in recent years, apparently because sagging oil prices have hampered Libya's ability to pay its bills.
The debt is being paid on the basis of a deal worked out by Andreotti with Libyan leader Muammar Qaddafi in 1984 that provides for Libyan oil to be sold by the Italian oil company Agip with the profits distributed among its Italian creditors.