* Gaddafi “shocked” by betrayal by former European friends
* Says economic ties will be damaged
* Says if west attacks, will ally with Al Qaeda
* No-fly zone would only unite Libyan people
ROME, March 15 (Reuters) - Libyan leader Muammar Gaddafi said he felt betrayed by former European allies like Italy’s Silvio Berlusconi who have turned against him and said business links with Europe risked lasting damage.
Gaddafi dismissed demands by world powers for a no-fly zone over Libya or the possibility of airstrikes, telling Tuesday’s edition of the Italian daily Il Giornale that: “We will fight and win. A situation of that type will only serve to unite the Libyan people.”
The Libyan leader said French President Nicolas Sarkozy, who has officially recognised the rebel Libyan National Council and called for targeted airstrikes, had a “mental disorder”.
In the interview, Gaddafi said the criticism of his rule from Europe, culminating in a demand by EU leaders that he leave power, had threatened ties.
“I was really shocked by the attitude of my European friends,” he told the newspaper. “They have damaged and endangered a series of major accords on security that were in their interests and the economic cooperation that we had.”
Asked about his relations with Berlusconi, previously his closest friend in Europe, he said: “I am so shocked, I feel betrayed, I don’t even know what to say to Berlusconi.”
EU leaders have slapped economic sanctions on Tripoli following the outbreak of fighting between rebel forces in the east of the country and troops loyal to Gaddafi and at a summit meeting last week demanded that he step down.
Until the unrest, economic ties had been blossoming. Italy, in particular had developed close links with its former colony, with which it also had agreements to block the flow of clandestine immigration from Africa. However Gaddafi said these were now under threat.
“I think and hope that the Libyan people will reconsider economic and financial ties and also those in the field of security with the west,” he said.
Eni (ENI.MI), Italy’s biggest oil and gas company, has extensive operations in Libya, including long-term contracts and says it plans to invest some $25 billion there.
Other Italian companies with significant interests or ties include defence and aerospace group Finmeccanica SIFI.MI and Italy’s biggest bank Unicredit (CRDI.MI).
“When your government is replaced by the opposition and the same thing happens in the rest of Europe, the Libyan people will perhaps take new relations with the West into consideration,” Gaddafi said.
He also repeated that his government had represented a bulwark against Islamic extremism, which could now be unleashed, triggering more serious unrest in the region.
“If instead of a stable government which guarantees security, these bands linked to bin Laden take control, the Africans will move in a mass towards Europe and the Mediterranean will become a sea of chaos,” he said.
If western forces attacked Libya, he would join forces with the radical Islamists. “We will ally ourselves with al Qaeda and declare holy war,” he said. (Writing by James Mackenzie; Editing by Jon Boyle)