FRANKFURT, Germany -- Europe and the United States were preparing Tuesday to unfreeze billions in frozen Libyan assets that will be crucial to supporting the country once Moammar Gadhafi's regime collapses, but the North African nation's recovery will be neither easy nor rapid.

Its valuable oil sector could take a year to restart and the economy badly needs reforms after being moved for decades by the whims of Gadhafi, whose personal rule was guided by a quirky socialist ideology, and by his cronies.

As the battle raged on in the capital, Tripoli, the country's rebel leaders eyed the tens of billions of dollars in Libyan money that governments around the world froze during the early days of the uprising.

The money is the nation's fortune and is expected to provide a capital cushion that other Middle Eastern countries that have deposed rulers this year, such as Egypt, don't have.

The European Union said Tuesday it was preparing to unfreeze the Libyan money once the United Nations gives its approval. President Barack Obama indicated Monday that he was ready to do the same.

"Even if it takes time to recover all of these assets, a small amount will help the interim government in the near term," Said Hirsh, Mideast economist for the London-based Capital Economics, said in a research note. He estimated Libya's frozen assets at around $110 billion, about 110 percent of the country's GDP.

"The U.N.'s approval remains crucial to both the EU and U.S. decisions to release the funds. Germany's foreign minister Guido Westerwelle called Tuesday for the U.N. Security Council to pass "as soon as possible" a new resolution that would unblock the frozen assets.

The U.S. has $37 billion in frozen Libyan money, while Germany blocked some 7.3 billion euros. Britain has frozen about $20 billion and the Netherlands 3 billion euros. The governments of Austria, Portugal and Spain have not revealed the size of assets seized in their countries.

While they wait for the green light from the U.N., Germany and the Netherlands each agreed to lend the Libyan rebels $144 million) to fund immediate rebuilding and humanitarian needs. The money will then be deducted from the assets they unfreeze.

But while Libya's transition government will be in the enviable position of having billions in cash and no debt, the economy's fundamental health is poor and the outlook uncertain.