Someone better wake up Alex Muscat

Alex Muscat is either fast asleep or seriously deluded, and I wouldn’t rule out either one of them.

The Parliamentary Secretary for Citizenship is taking a bold stand on a debate that exists solely in his own head.

Malta is not in favour of a tax on cash-for-passport peddling, Muscat said to the echo chamber of his local audience. “We have always been clear that every member state should retain full authority over citizenship and taxation, so we oppose an outright tax on every state. We won’t budge on these principles.”

I’ll leave aside the ‘principles’ of a government that joins a club and then sells the right to live in other people’s countries out the back door for a quick pile of cash.

Muscat is haggling over the fare he intends to pay for a ship that’s already sailed.

He can’t possibly have misunderstood Ursula von der Leyen when she visited Malta last month. The EC President said in very clear terms, “we have been discussing the subject of the golden passports and that it is of utmost importance to stop that procedure”.

Alex Muscat’s reply?

“There’s a point of principle where we’re not precisely agreeing.”

We’ve all been in one of those relationships, haven’t we? Dating a person who just won’t take the hint. They manage to twist “I don’t want to see you anymore” into “Okay, so how about next Saturday instead?”

It’s over, Alex.

The European Commission has opened infringement procedures against Malta to put an end to this thoroughly corrupt program once and for all.

Of course, the government has vowed to fight it to the bitter end, right to the European Court of Justice if necessary. At least it buys a little more time to flog a few more passports for a bit more cash.

The latest pipe dream they’ve latched onto is a working report published by the EU parliament this month.

Muscat is responding to the policy options contained in the paper as though they were new positions adopted by the EU parliament — the same parliament that’s slowly taking Malta to court to stop this sleazy nonsense once and for all.

Rather than put the report in context, the local media parroted Muscat’s statements, lending them unmerited weight even as the story was picked up by online investment rags.

They may want to back up and read the disclaimer at the start of the report:

“This document is prepared for, and addressed to, the Members and staff of the European Parliament as background material to assist them in their parliamentary work. The content of the document is the sole responsibility of its author(s) and any opinions expressed herein should not be taken to represent an official position of the Parliament.”

It’s an academic brainstorming exercise aimed at giving MEPs background reading on the issue of selling passports, with all possible options for remedying a loophole no one anticipated.

Alex Muscat is cherry picking quotes, as his colleagues are so fond of doing. But you don’t have to read beyond the three page Executive Summary to realize how damning even this academic paper is.

As the report points out, ‘citizenship by investment’ schemes raise five key issues.

The first one punches serious holes in Malta’s core argument that citizenship is within the exclusive remit of Member States.

“The potential risk that Member States face in violating the principle of sincere cooperation can lead to a ‘free riding’ situation,” the report says, “where Member States charge a price for a ‘good’ that is collectively created and provided at the EU level.”

They write that “rather than focusing on the lack of a ‘genuine link’ with the EU or its Member States” — as Malta has repeatedly tried to do by including residency requirements and property clauses — “attention should be paid to discrimination and the lack of fairness when comparing CBI/RBI schemes with traditional pathways to residence and citizenship in the EU”.

I guess someone must have noticed that, no matter how many times Alex Muscat called it ‘a conspiracy’, the Passport Papers expose revealed just how phoney Malta’s residency requirements always were.

The report also cites the risk that cash-for-passport programs facilitate money laundering and tax evasion, though the authors concede that the scale is difficult to assess “due to limited data and transparency.”

They are, however, confident in stating that “CBI/RBI schemes are more likely to be found where there is higher financial secrecy and/or poorer control of corruption.”

I’m sure the FATF would agree that this reads like a description of Malta.

The European Commission has made no bones about the path it intends to pursue. In case Alex Muscat missed it, that’s Option 1 of this research report: “Phasing out investment schemes in the EU”.

Don’t worry, I don’t think the feisty young parliamentary secretary is clinging to false hopes out of desperation because Joseph Muscat built an entire economy on dodgy money, and this cash flow has just about dried up — though that’s definitely a concern.

Grey listing has put the squeeze on Malta’s previously lucrative financial services and online gaming industries, and business is already jumping off the sinking ship.

The pandemic has tourism on its knees, and out of control construction is busy making sure there’ll be nothing worth flying down to see once things do recover.

And the EU has put predatory tax practices in its crosshairs. Thanks to the stench of disrepute the country is now trailing behind it, Malta’s bargaining position is increasingly weak.

Selling EU passports to wealthy foreigners is just about the only source of revenue they’ve got left, next to EU handouts, and they’re as hooked on it as a heroin addict desperate for the next fix.

Alex Muscat and his colleagues know their hold on power — and the impunity they’ve enjoyed for 8 long years — ends the moment they stop putting money in the bottomless pockets of their followers. They’d better act like the good times will continue, at least until they’re safely reelected.

And so the Parliamentary Secretary pretends he’s boldly defending the national interest which, when it comes to passport peddling, means undermining every other Member State. He’s doing so by taking a strong position in a debate that doesn’t include anyone else.

And that’s where we leave him… Shadow boxing in the corner of an empty ring, long after the referee counted him out, the audience went home and the janitor switched off the lights.