The government’s response to the European Court of Justice’s ruling on Tuesday will probably go down in this continent’s history as one of the worst examples of public communication ever.
As always, they clung tightly to every excuse they could find. They blamed the Nationalist Party (always a classic).
They claimed the court is politically motivated and that it went against the opinion of the Advocate General, exposing how they are unable to cope with a judiciary system that does not conform to their expectations.
They catered their message for a domestic audience and forgot to address the rest of the world.
The Maltese government continues to assert that the sale of golden passports is a matter of national competence and that Maltese passports are being sold under stringent conditions.
The fact remains: when disgraced former prime minister Joseph Muscat and his allies decided to sell unfettered access to the EU’s 27 member states via Maltese passport, they undermined the very essence of what it means to be European.
Here’s our detailed explanation of yesterday’s ruling and our analysis of the government’s response.
The bedrock
On Tuesday, the European Court of Justice (ECJ) declared that Malta “failed to fulfill its obligations” under Article 4)3 TEU and Article 20 TFEU.
In simpler terms, Malta’s golden passports scheme breached the country’s obligation to promote “sincere cooperation” with other EU member states (Article 4).
The ECJ also found Malta guilty of breaching Article 20, which refers to the rights and duties of “citizens of the Union.”
This is because of the fact that any Maltese passport buyer would be entitled to these rights without being truly linked with Malta.
Such rights include freedom of movement within the EU’s borders, the right to participate in EU Parliament elections as well as municipal elections, the right of protection from diplomatic or consular authorities in other member states, and the right to petition European Parliament and other supranational institutions within the EU.
The ECJ’s Grand Chamber entering the hall minutes before the historic judgement against Malta’s golden passports scheme was handed down.
The European Commission – which filed the case against the Maltese government – had immediately called foul when the details of Malta’s shadowy passports scheme had finally come to light.
“The Commission maintains that, while it is for each member state to lay down the conditions for the grant and loss of nationality, that competence must be exercised with due respect for EU law,” the Commission’s submission reads.
As you can probably tell by now, selling passports for a few hundred thousand euros a pop did not amount to “due respect for EU law.”
“As regards, more particularly, mutual trust, the Commission asserts that, by agreeing to grant the rights attached to Union citizenship and to extend that solidarity to others, the Member States rely on a common basic understanding of the nationality of a Member State, namely that nationality is the expression of a genuine link between a Member State and its nationals,” the Commission continued.
“The Court has recognised since 1980 that the special relationship of solidarity and good faith between a Member State and its nationals and also the reciprocity of rights and duties form the bedrock of the bond of nationality,” it added.
In other words, without an absolute guarantee that the link between a member state and its citizens is real (along with all the benefits and obligations that accompany it), the EU could not actually exist.
Genuine citizenship is what makes the EU’s fluid borders possible. One cannot function without the other.
Though it is the right of a member state to determine how citizens acquire or lose citizenship, the Maltese government’s brazen passport free-for-all posed so much danger to the core of the EU’s operations that both the Commission and the court found that it must cease at once.
“It is in the light of those various rights that the Court has held that the provisions relating to citizenship of the Union are among the fundamental provisions of the Treaties which are part of the framework of a system that is specific to the European Union and which are structured in such a way as to contribute to the implementation of the process of integration that is the raison d’être of the European Union itself and thus form an integral part of its constitutional framework,” the ECJ concluded.
A legal expert consulted by this website further confirmed our understanding of this ruling.
The source, who was granted anonymity to speak candidly, argued that the ECJ “was not fooled by the cosmetic changes” which the Maltese government made when the scheme was ‘reformed’ in 2020.
“The judgment is a strong monitum to the Maltese government that the Rule of Law must include full and effective respect for Malta’s international treaty obligations, no less than for customary international law which has always regarded a person’s genuine link with a particular country as the basis for citizenship,” our source stated.
“By paying only lip service to its commitment to the special relationship of solidarity and good faith between EU member states through the commercialisation of nationality, Malta has been found to be in breach of EU law,” they added.
The pittance
In its first reaction to the ECJ’s judgement, the Maltese government failed to acknowledge the incalculable damage caused to the EU by its golden passports scheme.
Living up to its reputation as “the night manager of the EU’s backdoor“ who will let you in for a few hundred thousand euros, the Maltese government only spoke about the €1.4 billion it claims went into our coffers as a result of the scheme. More on that figure in a bit.
In its formal submissions to the ECJ, there was no engagement.
The Maltese government simply insisted that this is a matter of national competence, framing its argument as a preliminary objection to everything else that the Commission charged with.
Never mind the fact that union citizenship is “one of the principal concrete expressions of the solidarity which forms the very basis of the process of integration,” as the ECJ succinctly put it. Our passport, our rules, we argued.
“…by challenging a Member State’s entire legal framework governing access to nationality, the Commission invites the Court to act as an ‘indirect legislator’, exercising a veto over national legislation adopted in an area that falls within the exclusive competence of the Member States,” Malta’s government argued.
Prime minister Robert Abela.
Abela continued to frame the ECJ’s decision in this manner after the judgement was published.
The prime minister refuses to acknowledge the fact that without EU membership, Malta’s passport would be largely pointless.
The prime minister chooses to ignore that the economic growth which his regime loves to boast about would not have been possible without the rights and responsibilities afforded to us by EU membership.
They want to pass off the sale of golden passports as an economic niche which they created while masking the fact that this niche only benefits anyone who is well-connected enough to profit from it – to the detriment of everyone else.
Though the Maltese government likes to pretend its scheme operates with a sophisticated filtering system for potentially criminal activity, the fact that one can purchase access to Europe makes any additional safeguards irrelevant.
Abela further claimed that the scheme left €1.4 billion in the state’s coffers.
He even sullied the good reputation of organisations like Puttinu Cares and Richmond Foundation by claiming that such organisations will be deprived of funding if the sale of golden passports stops, deliberately blurring the line between the government’s responsibility to provide welfare and its corrupt scheme.
It’s extremely concerning that everybody seems to have taken Abela’s word for it, especially given that there is no public documentation to support that figure.
According to the most recent National Audit Office (NAO) report on the matter, the National Social Development Fund (NSDF), which is where all the passport buyers’ contributions went, last filed audited accounts for the year ending 2021.
Worst of all, the NAO found that there was virtually no policy within the NSDF which explicitly determined how that money was spent.
Other news reports clearly showed how politicians like former parliamentary secretary and current Labour MP Alex Muscat and parliamentary secretary for public cleanliness Glenn Bedingfield abused these funds as a means of treating their constituents.
An analysis of the NSDF’s available annual accounts suggests that, while the unverifiable figure cited by the prime minister sounds plausible, the list of investments it actually made between 2016 – 2021 simply do not give credence to the claim that Maltese society has benefited greatly from the sale of golden passports.
Cumulatively, the fund raked in around €619 million between 2016 – 2021.
If one assumes that the fund maintained a consistent average annual revenue of around €100 million a year up until 2024, it is plausible to extrapolate a total income of around €1 billion since the scheme’s inception.
This still pales in comparison to the billions of euros of funding which Malta received from the EU since it became a member state.
The only social projects cited in the NSDF’s available annual accounts are a total of €140.5 million social housing and primary healthcare investments, a €5 million investment in Puttinu’s housing in London, and a €950,000 investment in Mater Dei’s catheterisation suites.
The rest of the investments mentioned by the fund amount to holdings in local banks and equities, corporate bonds, and Malta Government Stocks and Treasury Bills.
All other evidence which suggests that the NSDF’s social contributions were significant is effectively reliant on the government’s word for it.
This is especially compounded by the fact that the government has not been able to mention at least one passport buyer who actually became legitimately invested in Malta. If they did, they’d be wheeling them out on prime time television nonstop to prove just how legitimate the scheme is.
The only examples I can think of have a long history of abusive conduct. The great wave of economic activity that was supposed to be generated by high-income individuals is largely absent, indicating contributions were limited to the bare minimum imposed by the scheme.
Our conclusion
Though the government would love for you to believe otherwise, the ECJ’s decision to unequivocally condemn Malta’s blatant resale of its perks as a European member state benefits Malta’s future prospects.
The idea that the decision itself – and not the scheme – amounts to a reputational blow for the country is laughable. This mess is entirely the government’s responsibility, and nobody else’s.
This decision, along with the raft of other local and international court cases faced by former and/or current representatives of the Maltese government, grants a boon to the fight against corruption and provides further undeniable proof of the scale of the criminality which occurred with the government’s blessing.
Ultimately, this scheme solely benefits dubious individuals who would otherwise find difficulty operating within Europe and well-connected locals who made a killing off the lucrative trade.
In its submissions to the ECJ, the Maltese government hilariously claimed that it “has always acted in good faith and in accordance with the principle of sincere cooperation between the European Union and Member States.”
This judgement proves that, while the Maltese government does manage to drag wool over its own supporters’ eyes, nobody else is fooled.