L'AQUILA, Italy - Reviving L'Aquila's once-vibrant university and student life are key to restoring a city that was turned into a ghost town by last week's quake.

But it will be a long, costly and bureaucratic process to reopen the bars, shops and hostels catering to students in the medieval town. Despite many previous quakes in Italy, the country has no national reconstruction plan after a natural disaster.

Italy's interior minister said Tuesday about US$16 billion will be needed to rebuild L'Aquila and the surrounding area. The government is drawing up plans but survivors wonder how they will face the coming years.

"There is little industry here, the economy was based on the students from out of town, and they are not coming back for a long time," said Daniele Cerrone, who owned a pub in L'Aquila's ravaged historical centre. "In the meantime what are we going to do? Buy clothes and go to the pub between ourselves?"

Cerrone, 32, took out loans and scrimped for years to open his pub less than three months before disaster struck.

"A lifetime of sacrifices has been wiped out in a few seconds," he said. "L'Aquila is finished."

Thousands from Italy and abroad study at L'Aquila University, a storied school that traces its roots to a Jesuit college founded in 1596.

Among the 294 people killed by the April 6 quake many were students, including at least six pulled from a collapsed dormitory in the centre. The 6.3-magnitude quake damaged or levelled tens of thousands of homes and displaced some 55,000 people, including 33,000 who are living in tent camps set up across the region.

Officials said Wednesday that 20,000 of those displaced probably won't return home.

"Some of my colleagues are traumatized and want to transfer to another university," said Giulia Riccobono, a psychology student who commutes from Rome. The 25-year-old, who was due to graduate next week, has set up a Facebook group to encourage donations for the university.

"We need to stay. There are more important things than not being scared or having perfect lodgings," she said. "We can't just think of ourselves when an entire city depends on us."

Of L'Aquila University's 27,500 students, nearly half are from out of town, and holding on to them is essential to the recovery of the city of some 70,000, said university rector Ferdinando di Orio.

The humanities schools and administrative offices housed in ancient buildings in the centre have collapsed. The engineering school on the outskirts has been severely damaged, even though it was a modern construction, di Orio said. He did not provide a financial estimate of the damage.

The faculty of sciences, a reinforced-concrete building that suffered only light damage, became the de-facto headquarters for the post-quake university, with several faculties setting up temporary offices in the entrance hall.

University workers wearing T-shirts that read "I don't collapse" set up desks and computers, while professors and students donned helmets to check out damage in some areas of the building otherwise declared safe.

Primary and secondary students returned to classes Wednesday - some in the tent camps that are now their homes - but it will take more time for the university to find new venues for lessons and exams.

Beyond the damage, there is an urgent need to focus on lodgings and services for students, di Orio said. Initial checks have shown about half of the buildings in the quake zone have been rendered at least temporarily uninhabitable.

Di Orio said he was in contact with government officials, who had promised to help, though firm plans are not out yet.

So far, Prime Minister Silvio Berlusconi's conservative government has approved subsidies for families and business owners as well as the equivalent of about $132 million in emergency spending, and suspended payments on mortgages and loans until the end of the year.

But broader action will be taken only when the cabinet gathers for a meeting, expected next week in L'Aquila, to roll out reconstruction measures, which reports say could include new taxes to fund rebuilding.

Italy is one of Europe's most seismically active areas and has suffered at least one major quake in each of the last three decades. But the country's often unstable governments have never adopted basic recovery rules, opting instead to pass specific laws for each disaster, officials and experts said.

Without set rules on how to apply for disaster relief or a specific agency, like the U.S. Federal Emergency Management Agency, charged with distributing funds, the process is open to delays, corruption and unequal treatment for victims of different disasters, they said.

"Every time we need to start from scratch to reach the same results," said Vincenzo Riommi, the official in charge of reconstruction in Italy's last major quake, which hit the central Umbria region in 1997.

That temblor killed 11 people and devastated medieval buildings and churches, including Assisi's famed basilica.

Riommi said reconstruction costs were around $16 billion. Though not all the money has been allocated and works are still incomplete, most of those displaced in the quake were back in their homes five or six years later, he told The Associated Press.

That's a success story in Italy, where reconstruction for a 1980 quake that killed some 3,000 people in southern regions lasted more than 20 years, amid corruption scandals and infiltration by organized crime in building projects.

Economist Tito Boeri suggested the government should introduce compulsory insurance for buildings in case of natural disasters to reduce the cost of reconstruction for taxpayers.

It would also discourage shoddy construction practices and code violations that were blamed for many of the collapses and deaths in the latest quake and are at the centre of a criminal probe by L'Aquila prosecutors.

"In Italy the state pays for all the reconstruction costs, while in other countries private insurers play a role," Boeri said. "Also, with insurance you can't build on the cheap because then the premium goes up."

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