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What Happens if the EU Initiates Suspension Proceedings Against Malta?

Recent news reports about Malta have been far from ideal. The media coverage about Malta in the past few years has been somewhat critical and negative. One of the controversial government initiatives which was constantly reported in a negative manner is the passport scheme where Maltese nationality has been put on sale for high net worth individuals.


Amidst a growing perception of corruption and impunity, Malta was hit with another story which impacted its reputation. Claims of close ties with high ranking political figures allowing for better chances of an easier acquisition of the Maltese passport by an employee of a leading law firm were picked up by foreign media. All these claims would not compare to the recent tragedy plaguing the country however, where the death of a journalist is being linked to a political assassination.

The term “rule of law” has been thrown around quite a number of times recently. It would be folly to think that the term is being solely used just by us the Maltese. A Member of the European Parliament, Sven Giegold, who also happens to be involved in the Greens group highlighted that since Malta’s rule of law left a lot to be desired, an investigation should be initiated and article seven proceedings are to take place against Malta. In a nutshell, article seven proceedings mean that an EU country may have certain rights suspended.

The Member of European Parliament states that although progress has been made in the Daphne Caruana Galizia investigation, very little was done on the corruption, money laundering and impunity fronts.

So what are the potential risks for Malta should the European Union decide to initiate such proceedings? For one, the reputation of Malta will continue to be impacted, creating a perception that it is not a reliable and trustworthy jurisdiction. Such perceived volatility will make Malta a less attractive jurisdiction for investors and business owners. No serious business would want to consider setting up shop in a country which is in turmoil with the European Union. In turn, this would potentially have adverse effects where job opportunities would be reduced or stagnate, together with less demand for rent and property acquisition. This could be extremely worrisome for those with an avid interest in the wellbeing of the property market, especially if investments have been made.

Well wishers of Malta will certainly hope that it does not come to this. What, however, would restore the country’s reputation? Will a new Prime Minister be enough? Does Malta need to scrap its existing passport scheme? Let us know in the comments section below.

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