[WATCH] Global network with an agenda attacking Malta’s reputation – Edward Scicluna

Finance Minister Edward Scicluna said on Xtra that Malta received 'unjustified' criticism, but acknowledged anti-money laundering efforts needed improvement

Finance Minister Edward Scicluna
Finance Minister Edward Scicluna

Malta has been on the receiving end of unjustified and unprecedented attacks on its reputation, which did not reflect the true state of affairs in the country, Edward Scicluna said.

Speaking on Xtra tonight, the Finance Minister said that there had been a campaign instigated against Malta, which painted a picture of the country which did not reflect the facts.

Whilst acknowledging that anti-money laundering efforts needed improvement, Scicluna said the way the "attacks" took place showed there was “a global network with a singular agenda” behind the negative reports on Malta.

“I never knew of a country which got attacked in this way, through no fault of its own. When you listen to the things about Malta which are said, but then look at the actual facts, you ask yourself if this is the same country people are criticising,” he remarked.

In terms of the effect reports of wrongdoings in Malta – including by European institutions such as the European Banking Authority – could have on investment, Scicluna said that investors who did their homework would realise that the repeated allegations were not factual.

He said that anti-money laundering infringements on the island were relatively small compared to those which have emerged in other European Union member states.

Property prices will self-correct

Scicluna defended the rampant construction around the island, saying it was an inevitable consequence of the high demand, and shortage in supply, of property.

He said this was an indication of normal economic progression, and that high property prices would eventually stabilise.

“I’m not happy that we have cranes mushrooming everywhere,” he said, “But that is the normal response. Prices will then moderate themselves – it will be self-correcting.

Asked by presenter Saviour Balzan about the matter of local businesses not being able to offer the same high salaries as those given by large foreign companies operating in Malta, Scicluna said that this was also a normal situation in a growing economy.

“When a sector is growing, it’s normal that it can afford to pay its workers more. Sectors which aren’t expanding will pay less. This leads to economic mobility from sector to sector,” he said.

“Maltese businesses have never had so many opportunities as today. Now it’s up to them to see what the future for them will be. If they cater for something which society doesn’t want, they won’t succeed.”

Government shoots the messenger instead of addressing criticism – Mario de Marco

Mario de Marco, a guest on the programme’s second part, criticised the government’s lack of vision and long-term plan, saying the economy was growing with no regard for the consequences.

The Nationalist Party's finance spokesperson said that selling passports had helped the economy expand, but brought with it repercussions.

Nationalist Party finance spokesperson Mario de Marco
Nationalist Party finance spokesperson Mario de Marco

He said the criticism levied against Malta came from important institutions, and not from individuals, and that the government was shooting the messenger instead of addressing the problems identified.

“This was a cardinal mistake,” he said, “Scicluna didn’t take the bull by the horns and try to solve the shortcomings of the Financial Intelligence Analysis Unit and the Malta Financial Services Authority.”

He highlighted that the EBA’s damning report on the FIAU’s conduct and its investigations into Pilatus Bank,had come under Scicluna’s watch.

“This happened during Scicluna’s tenure, and he has to answer for the shortcomings,” de Marco said.

 “The fact that our country is being mentioned abroad in a bad light does not make me proud. But those pointing out the problems aren't in the wrong. It is those who are not doing things the right way who are to blame,” he said.

Asked about foreign companies in Malta which were paying less tax while having enormous turnovers, making it hard for local companies to compete with them, de Marco said that the island’s favourable taxation system is what attracted so much investment in the first place.

However, he said a differentiation should be made, in terms of the legal system, between foreign companies opening a base in Malta, and foreigners coming to live in Malta and opening a business here, while still benefitting from preferential tax conditions.

“We need to have in place some sort of discriminatory system between international businesses opened by non-residents, and businesses opened by foreigners who are resident in Malta,” he said.