Keeping within one’s remit

Looking at it from a purely domestic perspective, Opposition leader Simon Busuttil was right to bring up Panama Papers in his two-minute speech to the European Commissioners in Parliament. It is indeed surreal that Malta should be taking over the Presidency of the EU, at a time when a senior Cabinet minister is still embroiled in a scandal that has rocked the EU to its foundations. It was an apt moment for Busuttil to remind his listeners – primarily the local audience – that Panamagate is still an important concern for the Maltese people. 

Indeed it still is, though not always for the same reason. Busuttil is certainly right in his assumption that the issue has considerably dampened enthusiasm for the Labour government, and disillusioned the population at large. The fact that Mizzi is still a de facto minister for energy is a constant reminder of Joseph Muscat’s disregard for the public sentiment that Panama Papers evoked. It is concrete evidence, if any were needed, of a mismatch in standards of justice in this country: illustrating the different weights and measurements applied to the higher and mightier echelons across the political spectrum. 

While Mizzi and Schembri both retained their positions despite being named in the Panama Papers, those occupying lower rungs of the power structure (literally the entire country, except for a handful of individuals) experience a different form of justice. For everyone else, the loopholes are closing, and the penalties for transgression are forever getting higher.

Yet not only have those two officials ‘gotten away with it’, but Mizzi in particular was even given the chairmanship of the EU Energy Council. It is as though the Prime Minister wishes to up the ante, and make this shabby affair the crown of his entire first legislature. 

To compound matters, both Muscat and Mizzi have to date side-stepped entirely pertinent questions about this issue. Earlier in the day, Konrad Mizzi was addressing a press conference with Maroš Šefčovič on the delivery of the first LNG consignment to Malta. He evaded all questions on his Panama offshore company.

The PN leader is right to remind Muscat (though less so the EC) about his failure to take the necessary action... even if it remains debatable whether the same people who now mistrust Labour, would be willing to trust the PN on the same issues. 

But that is a domestic perspective, and the official take-over ceremony was an international event. The picture changes when viewed from the European Commission’s angle. 

Simon Busuttil expected Jean-Claude Juncker to say something about Panama in his address at the ceremony: to give Joseph Muscat a public slap on the wrist. But the European Commission can only operate within its remit. Busuttil was wrong to expect anything more from the Commission, for factual as well as diplomatic reasons. Even in the case of the ElectroGas plant, the EC’s state aid investigation had nothing to do with corruption, because the Commission is not empowered to look into that. The EC is designed to function within a power-sharing network that does not trespass too far into the internal affairs of member states. 

Above all, the Commission avoids roaming into countries’ political swamps. People tend to forget that the EU institutions – bar the parliament – are controlled by member state governments. Whether this is right or wrong is a moot point, but in practice it means that political action has to be taken by citizens of that particular country – in this case Malta. Expecting the EU to step in each and every time is redolent of a colonialist mentality.

Moreover, Busuttil ought to be mindful of the logical flipside to this argument: would he, or any PN politician, invite the European Commission’s political comment on Malta’s full input in an investigation of our tax system: which was the subject of a report by the European Greens, accusing Malta of acting like a tax haven? Surely – as the PN has always done in the past – Simon Busuttil would have stood by the solemn principle of European subsidiarity, insisting that taxation is a sovereign affair.

Lastly, both sides of the political spectrum must take a good hard look at themselves before riding on a public anti-tax evasion sentiment. Ultimately, Panama Papers is also about tax avoidance, in whatever shape or form: EU or non-EU, legal or not. To be outraged by Panama Papers also means that we should be outraged at the way the Maltese economy makes a killing out of wiping off tax that should be paid in the countries where those profits are being generated. To do this, Malta offers an 85% rebate on foreign companies operating in Malta – on its own, a discrimination against local investment – reducing the tax paid to a mere 5%.

Europeans, Maltese included, are concerned about this form of tax avoidance, too. Yet both Simon Busuttil’s Nationalist Party and Joseph Muscat’s Labour Party – though they never seem to agree on most other things – both defend this policy from Commission interference.

Sovereignty however works both ways. Just as the EC must keep within its remit, and desist from wading into political frays... political parties must keep within their remit too.