The demise of the golden goose

It was bound to happen. After years of trying to justify that it was a legitimate way of bringing in revenue in the form of foreign investment, and that it was the prerogative of a member state, Malta has lost the argument in its defence of its golden passport scheme.

According to the recent ruling by the European Court of Justice, Malta’s citizenship by investment programme was in breach of the principles of “sincere cooperation” and “mutual respect” towards other member states. The court’s ruling was based on the argument that the granting of Maltese citizenship through a commercial transaction would also grant EU citizenship and thus impact other member states.

Despite requiring residency, Malta’s citizenship by investment scheme only requires those buying a passport to be physically present in Malta on two occasions—when biometric data is collected and to recite the oath of allegiance. Thus, there is no real link between those applying for citizenship and the country.  We all knew this; we were not fooling anyone by pretending that the majority of those investing in this scheme had any other motive but to acquire what is basically an EU passport.

Those who have become wealthy through this scheme (you know who you are) will probably blanch at this ruling. Their golden goose has effectively been killed off. Yet, in the long run, I see this as a positive outcome for Malta, because someone had to slam on the brakes. We simply cannot continue down this path of selling off everything, including what it means to be a Maltese citizen, in exchange for a wad of cash. The mercenary nature of selling our passports has always appalled me—it’s just so cheap and tacky. After all, when everything can be sold and bought, then nothing has any real intrinsic meaning or worth and that includes our nationality, our culture and what it means to be Maltese.

There is also the very real concern of just how many criminals have acquired a passport for their own shady motives, thus posing a real threat to us all. Those involved in money laundering, corruption, human and drug trafficking—the potential list of unsavoury types who would want to get a foothold in the EU through Malta, is endless. Is that what we really want to be known for? Or does none of that matter as long as the money is rolling in and those who work in the ancillary sectors which prop up this scheme are also benefitting?

In an attempt to stave off criticism, the government obliges those buying citizenship to also make a donation of €10,000 to local voluntary or philanthropic organisations. When NGOs such as Hospice, Puttinu Cares and the Malta Community Chest fund are direct beneficiaries, it tends to shut down certain voices, as these entities have become compromised by accepting the money. I find that roping in cancer charities is a particularly calculated, cynical move because they would be hard-pressed to refuse these much-needed funds. Patients who turn to these charities are in turn made to feel “grateful’.

Other high-profile organisations which have benefitted are Heritage Malta, the Manoel Theatre, the Arts Council, the Malta Philharmonic Orchestra, the Commissioner for Animal Welfare and even certain football and band clubs. The net has been spread far and wide, with over €6.5 million being donated by 2023, and of course, that is precisely the card used by both Joseph Muscat and Robert Abela when defending the scheme. “This money has saved band clubs from extinction,” Abela said, knowing that pushing these types of patriotic local buttons will elicit the correct emotional response.

According to the latest annual report, more than 5,000 people and their dependents have been granted Maltese citizenship and passports through this scheme which, you guessed it, means 5,000 properties have been purchased or leased for this precise purpose. No one selling their property in this way can be so ingenious as to claim that they did not know what it’s for; perhaps they don’t care, which is fair enough, but I trust that they then do not go around tut-tutting and wringing their hands at how mercenary the Labour administration is.

Following this ruling, the government has stressed that those who have already bought passports will not be affected. From now on, however, Malta can only grant citizenship if the applicant has a genuine link to Malta. Failure to comply will mean hefty fines.

The man who introduced the idea of golden passports, Joseph Muscat, predictably lashed out against the ruling. “I still believe that there is a case for the [passport] programme of Malta, that is the best in the world, to keep going on with some changes. Especially when the US announced a similar programme,” Muscat said.

How typical of him to latch on to the despicable Donald Trump as an example, who announced in February that the US would sell a “gold card” to wealthy foreigners, giving them the right to live and work in the US and offering a path to citizenship in exchange for a $5 million fee. This, at a time when undocumented immigrants and their US-born children, are being hounded and deported (it should be obvious that if a mother is deported, she will take her children with her. She is hardly going to leave them behind).

But in Trump’s world—and in Muscat’s—flashing enough money around circumvents the whole concept of who has the right to be a citizen or not. Here in Malta, technically, foreign nationals without family ties can become naturalised citizens if they have lived in the country for four cumulative years with a permanent residence and residence permit in the last six years. But even if one has lived here much longer than that and can prove very strong ties, this does not guarantee that one will be granted citizenship should one wish to apply for it and, in fact, ordinary people have been turned down for no reason at all.

Meanwhile, Robert Abela said that while he respects the decision, he has vowed to keep fighting to protect Malta’s interests, echoing Muscat’s allegation that by supporting this ruling, Opposition members in Brussels were endangering people’s jobs and trying to damage the economy.

However, in his May Day speech he also claimed: “Investments totalling half a billion euro will be finalised over the next two years, with major expansions from companies such as ST Micro Electronics, Baxter, Lufthansa Technik, Magro Brothers, Actavis, James Caterers, and Gimas. These projects are expected to generate high-quality careers in strategic sectors like digital technology, clean energy, pharmaceuticals, advanced manufacturing, medical devices, and financial services.”

This is good to hear, especially since if these investments do materialise then we should not have to worry too much about the golden passports being curtailed, should we?