News that the government and the European Commission have struck a deal on Malta’s controversial citizenship scheme has been probably greeted by a collective sigh of relief by the whole country.
The issue took far too long to be resolved, it damaged our international reputation, questioned our commitment to European values and domestically became a partisan matter when consensus could easily have been reached at an earlier stage had Labour not been so short-sighted and hard-headed.
The agreement between the government and Commission on the Individual Investor Programme, which introduces a residency element to the scheme, represents the third major change to the programme introduced by Joseph Muscat since the citizenship law was passed in November.
First the secrecy clause in the law was repealed, then additional requirements to the €650,000 price tag were announced, namely the purchase of a property worth at least €350,000 as well as €150,000 in government bonds or shares, and now all applicants for citizenship will have to provide proof that they have resided in Malta for a period of at least 12 months.
How effective the latter clause will be, of course, remains to be seen. But why was the government so obstinate and arrogant when defending the citizenship scheme over the past few months? Why did it ridicule and attack the Nationalist Party when it insisted on the removal of the secrecy clause, the introduction of investment requirements and crucially, a link to residency, only to perform a U-turn in all three areas?
Why, furthermore, did the government antagonise the European Parliament, where it suffered a humiliating massive vote criticising its citizenship programme, as well as the European Commission, where Commissioner Viviane Reding said Malta’s sale of citizenship clashed with international law and the EU treaty?
Despite Dr Muscat’s defiant, and somewhat eurosceptic tone in the aftermath of the European Parliament vote, the simple truth is that the government had to concede on the residency requirement for its citizenship programme.
The alternative would have been the beginning of infringement proceedings against Malta by the European Commission, which would have almost certainly ruined the country’s Individual Investor Programme.
Some might believe that Dr Muscat was playing a game all along and that his intention was to get a deal to his liking, hence his initial proposal to simply sell a Maltese passport for the sum of €650,000 and then negotiate.
Had the government suggested a one-year residency requirement as well as the purchase of property and bonds at the outset, the argument goes, it would have been pressured by the Opposition, the social partners and the European Commission to substantially increase these requirements.
If this theory is correct then the country has paid a very high price for the government’s ‘success’. We have damaged our image and credentials in Europe, and worse, created the perception in international circles and the global media that Malta is in a dire financial situation and is selling passports because of this. Such a perception will be difficult to undo, and could have negative long-lasting consequences for Malta.
The European Commission has now said it considers the citizenship scheme issue settled. The whole country must now look ahead.
The Nationalist Party, which has been proved largely right in this episode, also needs to look forward and should withdraw its judicial protest against the scheme. It has said it will take an official position on the matter once the government officially publishes a Legal Notice explaining the new residency requirements. The sooner this Legal Notice is published, the better; the country needs to put this chapter behind it.