Malta starts 2017 with a bang today, assuming the rotating six-month presidency of the Council of the European Union at a testing time for both the bloc and the government.

Britain is about to embark on its Brexit misadventure. EU Member States are far from achieving solidarity on immigration. The EU is still in the financial doldrums. These are among the “known knowns” of 2017, to borrow a famous phrase.

Then there are what may be called the “known unknowns”. Extreme nationalism is gaining traction but how much more in the French and Dutch polls of early this year? Will populism make further inroads in Italy if an early election is held there? When and where will terror strike again? How destabilising will President Trump be to the world order? Will the EU project survive?

The answers are awaited with some trepidation. It has been described as the “perfect storm” for Malta as it takes over the presidency. But this year, there will continue to be stormy weather for the government back home too. When a special European Parliament committee investigating the Panama Papers comes visiting in February, the government will have to manage the fallout.

Now, in normal times, the subject of this start-of-the-year editorial could have been Malta’s presidency, or the effervescent economy, or the damage of over­development, or the breakneck speed of legal changes in civil rights. But these are not ordinary times in politics.

Simon Busuttil has called this the most corrupt government in the history of Maltese politics. And that was even before the Panama Papers were re­leased. Then, hyperbole may have played a part in his claim. Now, after a sequence of events that also include the recent serious allegations of corruption against Evarist Bartolo’s canvasser, the statement carries more justification. Panama cannot be relegated to just another bread-and-butter issue, for its implications are extremely serious and far-reaching, and need to be harped on.

Firstly, the scandal has marked Joseph Muscat as a flawed leader. It was a catastrophic ‘fail’ when he did not take any effective action against Konrad Mizzi and Keith Schembri after they were exposed as owners of Panamanian companies, raising suspicions of attempts at tax avoidance at  least and corruption at worst.

Secondly, it has put the Prime Minis­ter’s two close and vital colleagues under a permanent cloud of suspicion and is casting a shadow on him too, with a third Panama company still shrouded in utmost secrecy.

Thirdly, Dr Muscat’s moral autho­rity is in tatters and the country may be paying a heavy price for that. In allowing the pair to get off the hook, Dr Muscat is effectively tempting others in positions of power to say: “If they can get away with it, why shouldn’t I?” His implicit message to them, as well as to the voters, is: “Go ahead.” It will be a major task for a new government to wipe that mindset away.

Fourthly, there will be other lasting damage in that politicians in general are now viewed with even greater disdain and cynicism than before, tarnishing the reputation of good, conscientious ones – and there should still be plenty of those around – along with the bad.

In short, the Panama scandal has well and truly defined 2016. It remains to be seen whether in 2017 it will reverberate with the same force. Who can tell what “unknown unknown” may strike next and eclipse even this issue?

What is sure is that the rotten affair will continue to dog the government this year. The trio at its heart will not be able to get away from it, and politically, they may not be able to get away with it.

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