Konrad Mizzi is facing pressure from within the Labour Party parliamentary group to resign as concern mounts over the impact of the Panama scandal.
Sources speaking to the Times of Malta said various Labour MPs expressed concern on what they saw as the Panama affair’s “stifling impact” on government work.
“Panama has hijacked the debate and overshadowed all the government’s good work,” the sources said, adding this was the first time that “tangible tension” had started to appear within the Labour Party since Joseph Muscat became leader in 2008. Labour MPs are frustrated and angered over what they believe is a story that will not go away and one that could damage the party’s chances at the polls.
“For the past two months the government has had two of its key players, [Energy Minister] Konrad Mizzi and [the Prime Minister’s chief of staff] Keith Schembri, focusing their energy solely on the Panama affair as the saga overshadowed everything else… The government has lost its serenity,” the sources said.
The government’s internal organisation, normally coordinated by Mr Schembri, had also slacked, they pointed out.
On Monday, Dr Mizzi also faced pressure to resign from some of his Cabinet colleagues at what sources described as a “very animated” meeting of the parliamentary group.
The meeting was dedicated to the Panama Papers, which started being released internationally the night before. The sources said some of the veteran Cabinet members, including Evarist Bartolo and Leo Brincat, wanted Dr Mizzi and Mr Schembri to go although there was no organised effort to force them out.
However, such views were stonewalled by the Prime Minister, who is standing behind both men.
“[Konrad] Mizzi and [Keith] Schembri are not being patted on the back by Labour MPs but, despite the discomfort and anger, Joseph Muscat continues to insist he is acting in the same way he did with Manuel Mallia and Michael Falzon by waiting for the findings of an independent audit before deciding what to do with both people,” the sources said.
Although the publicly-available documents from the Panama papers revealed what many already knew about Dr Mizzi’s and Mr Schembri’s overseas financial arrangements, news reports in Australia spoke of two, previously unknown, failed attempts by their advisers to open bank accounts in Dubai and Panama for their Panamanian companies.
Sources said Dr Muscat squandered the chance to use the latest reports about the failed attempts to open bank accounts as a justification to let go of Dr Mizzi and Mr Schembri.
“It is not as if Joseph Muscat does not know that he is taking the wrong decision when keeping both men on board but he has a problem removing Keith Schembri, with whom he has a very close relationship. Removing the minister alone will make little sense,” the sources said.