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11 EDITORIAL maltatoday | WEDNESDAY • 30 APRIL 2025 THE European Court of Justice has delivered what could be considered a landmark judgment in the case instituted against Malta over the golden passport scheme. The scheme under its original format started in 2014 and granted citizenship to wealthy individuals against payment and subsequent investment in property. The scheme was amended in 2020, to include a residence re- quirement for potential applicants in a bid to stave off le- gal proceedings by the European Commission. Malta's primary argument throughout proceedings was that the granting of citizenship was a member state com- petence and the European Commission was overreach- ing when it demanded the programme be terminated because it undermined the principles of mutual trust be- tween member states. The purchase of citizenship auto- matically meant that wealthy foreigners would also ben- efit from EU citizenship and the rights derived from this such as free movement and political rights such as voting and petitioning EU institutions. Malta's case found the sympathetic ear of EU Advo- cate General Anthony Michael Collins, who in an opin- ion published on 4 October 2024, concluded there was no case against Malta on the basis that citizenship was a member state prerogative. However, the judges at the ECJ gave short shrift to Col- lins's opinion and in their judgment found that Malta's citizenship by investment programme was in breach of the principles of "sincere cooperation" and "mutual re- spect" towards other member states. The court's ruling was premised on the argument that the granting of Mal- tese citizenship through a commercial transaction would also grant EU citizenship and thus impact other member states. The court found that the changes enacted in 2020 that required an applicant to have been a resident were not enough to establish a genuine link between the foreign applicants and Malta. Indeed, the court noted that despite the residency requirement, applicants were only required to be physically in Malta on two occasions – when biom- etric data is collected and to recite the oath of allegiance. The ruling thus has limited what was once thought to be an unfettered competence of the member states in the realm of citizenship. Our reading of the ECJ ruling is that the stature of EU citizenship, which only exists as a result of citizenship derived from the 27 member states, has been elevated. The ruling has given substance to the principles of "sin- cere cooperation" and "mutual respect" as outlined in the EU Treaties. It has effectively quashed citizenship pro- grammes that are purely of a transactional nature and where no genuine link exists between those acquiring citizenship and the country. If we are to be honest with ourselves, the unique selling point for Malta's citizenship scheme was that prospective applicants would be gaining all the rights that come with EU citizenship. None, or very few, of those who acquired Maltese citizenship were genuinely interested in living or investing in Malta. The target was not Malta but the freedom of movement Maltese citizenship granted them across the whole of the EU. Irrespective of the reasons why someone would want to buy another country's citizenship – there could be legit- imate reasons – such a scheme was always going to raise concerns because of the inherent risks that come with it, such as criminals trying to find safe harbour in an EU ju- risdiction. Within this context citizenship acquired through these means seizes to be purely a national issue. The ECJ's decision may be hard to fathom, considering the eyewatering €1.4 billion the golden passport scheme has generated since 2014 and the beneficial social, cultur- al and sports investments made as a result of the funds transferred to the National Development and Social Fund (NDSF). Malta managed to create a modest sovereign fund by exploiting its EU membership. It may not have been the most ethical way to raise funds; it may have been a risky strategy and one that brought the country undue negative attention; but it delivered the money. However, it would be wrong for the government to turn the citizenship by investment scheme into a dogma that defines Malta's economic success. The economy flour- ished over the past decade despite the scheme and not because of it. Neither did public finances depend on in- come from passport sales to turn into surplus in the years preceding the pandemic. And the current downward tra- jectory in the deficit has nothing to do with income from the passport scheme. The way forward in light of the ECJ ruling is not to per- severe down the same path but develop a programme that truly requires a genuine link through effective resi- dency and investment that precedes any application for citizenship. If anything, Malta would be better served in the coming years if it manages to attract genuine talent in the fields of science, research and development, robotics, AI and biosciences just to mention a few. This would be more in line with the long-term plan envisaged in Vision 2050. The golden passport scheme does not define Malta's economic success but it must change maltatoday MaltaToday, MediaToday Co. Ltd, Vjal ir-Rihan, San Gwann SGN 9016 MANAGING EDITOR: SAVIOUR BALZAN EXECUTIVE EDITOR: KURT SANSONE EDITOR: PAUL COCKS Tel: (356) 21 382741-3, 21 382745-6 Website: www.maltatoday.com.mt E-mail: dailynews@mediatoday.com.mt Organisation, which, for those states that are members of it, remains the foundation of their collective defence and the fo- rum for its implementation." Reading Article 42.7, one could conclude that the EU al- ready is, in fact, a defence alli- ance. At a minimum, it raises questions about how the neutral states square the circle of being a member of a union that has a mutual defence clause while upholding their non-aligned status. The Nationalist Party and the Labour Party have reached a consensus on the need to re- write the neutrality provisions in the Constitution, but neither has tabled a proposal for how to do so. The apparent contradiction between neutrality and EU mu- tual defence characterised Mal- ta's parliamentary debates both on the draft Treaty Establishing a Constitution for Europe and the Lisbon Treaty. That notwithstanding, the Maltese government had been advised by the EU Advocate General that the fact that an EU member state requests help based on provisions in the Lis- bon Treaty does not entail or does not necessarily lead to ac- tions that infringe the neutrality clauses as protected by the Mal- tese Constitution. Furthermore, there are indica- tions that Malta is committed to active neutrality: it remains in the European Defence Agen- cy and participates in military and civilian missions. Also, the creation of deployable military capabilities is one of the objec- tives listed in the Armed Forces of Malta Strategy Paper 2016- 2026. Currently, Malta does not consider itself to have joined a military alliance or a defence union. Still, it would be pre- pared to ask for assistance from other member states in similar circumstances as those contem- plated under Article 42.7. But no Maltese government has ever publicly discussed the scenarios in which it could make such a request.