Issue link: https://maltatoday.uberflip.com/i/246133
6 News maltatoday, WEDNESDAY, 22 JANUARY 2014 Galvanising the c Where does the sale of citizenship debate leave the Labour and Nationalist Party on the eve of the campaign for MEP elections, JAMES DEBONO asks? THE citizenship debate has galvanised the core of both parties, a prerequisite for both major parties on the eve of next May's MEP elections when both parties need to ensure a full turnout of their diehards. But this could come at a cost, with PL risking alienating middle of the road voters by its isolation from the European mainstream and the PN risking from appearing too confrontational. Surely the ill-conceived 'citizenship for sale' scheme which earned Malta its first ever rebuke in the European parliament and a lot of international bad press, has brought to light the first signs of nervousness in an otherwise over-confident government. Rather than a deliberate strategy, Labour's radicalisation is, more than anything, a reaction to its international isolation. For the first time since its colossal defeat in March, it was the Opposition which appeared to be controlling events. But does the Opposition risk coming across as spoilsports if the scheme does in fact yield the €1 billion promised by Muscat? A nervous government For the first time in its first 10 months in power, Muscat showed the first signs of not being sure of himself. For the whole citizenship experiment showed that the boldness of the new government may well result in hasty decisions. The scheme has already been changed twice. The first admission that the scheme was conceived without any depth of thinking was the removal of the controversial secrecy clause, which would have kept the identity of prospective citizens a state secret. While this could be seen as a sign that Labour was willing to listen to criticism, it came too late in day, after parliament itself had rejected an Opposition motion to remove this clause and well after the negative publicity rot from spreading to other member states. Plugging holes with new money Prime Minister Joseph Muscat in the international press. The second change was the decision to tie the sale of citizenship to investment in property and bonds. Through this change, the government managed to rope in a part of the Maltese establishment, especially through the endorsement given by the Chamber of Commerce and the Malta Developers Association. While this endorsement is highly symbolic, it failed to address the criticism that Malta was selling its citizenship in the absence of any residency requirements. Coupled with this was Finance Minister Edward Scicluna's own admission that there were mistakes in the way the scheme was marketed, and his suggestion that the amount of awarded citizenship would be capped to 50 a year… only to be contradicted by his own government when the scheme was capped at 1,800. Fundamentally, the government seems to have completely underestimated the bad press and the indignation of Euro parliamentarians of all ideological hues. This shows a lack of judgement. Isolated in Europe Ultimately the only MEPs to back the Maltese government were notorious extreme right politicians like Marine Le Pen and euro-sceptic nutters. On the other hand, 90% of Socialists, most Communists and all Greens and Liberals voted against. One may well argue that the government does not care about being isolated, as long as the scheme, which reaps the financial benefits, is kept on track. But by resorting to ultranationalist political discourse, which depicts the Opposition as 'traitors', it went overboard. Surely this kind of discourse may fit in well with the party's attempts to rekindle enthusiasm within its hard core. But by giving vent to anti-EU feelings, the government risks unleashing a Eurosceptic backlash. Coupled with the government's hawkish stance on migration, this could result in a lethal cocktail, which further alienates it from the European social democratic mainstream. Moreover, while Muscat may play the Mintoffian card, by projecting himself as an assertive leader by pushing ahead with the scheme, his confrontational and divisive approach may well alienate some of the switchers who were attracted to Labour because of its inclusive appeal. Surely switchers are a cross-section of Maltese society and some of them – particularly the business oriented – may well warm to a scheme which offers new opportunities for property developers. But switchers also include voters who are disconcerted by any display of Euroscepticism or negative publicity for the country. In fact, the latest events should well raise questions on Labour's EU credentials. Labour's answer to this was to proclaim that the party is both Europeanist and globalist, thus taking a leaf from David Cameron's Tory Party in the UK, where a group known as "globalists" considers Britain's estrangement from Europe inevitable while looking at Asia as the source of Brit- ain's long-term prosperity. Unsurprisingly, most Tory MEPs abstained on the motion singling out Malta's scheme. Another problem for Labour is that it would be contesting the MEP elections under the banner of a European 'political family' – in this case the European socialists – who are ideologically opposed to what is being projected as one of the party's most important revenue generating policies. Labour's race to the bottom One legitimate argument made by the Maltese government is that there are other schemes in Europe which tie citizenship to investment, namely bankrupt Cyprus which offers citizenship for €3 million in bank deposits or €5 million in property, along with equally bankrupt Portugal, which offers citizenship to property buyers after a five years residence period. Austria, another country mentioned by Labour, only offers citizenship to investors who make a remarkable contribution through technological advancement – it does not stipulate a price tag, and is therefore not comparable to Malta. In fact, Austria only issued the investment clause to issue 23 citizenships in 2011 and none in 2012. But while moral objections apply to all schemes which discriminate between rich and poor migrants, politically Malta's scheme was so brazen and in-your-face that it was bound to attract more attention in the international press. Moreover by undercutting other less brazen schemes and projecting itself as a leader in the dubious business of turning citizenship in to a tradable commodity, Labour moved the goal posts by raising the possibility of a race to the bottom, with other EU member states – especially those hard-pressed by financial pressures – being encouraged to go down Malta's road. Faced with the possibility of the citizenship market, the EU Commission is bound to act. By citing Article 4.3, which calls on member states to refrain from any measure which could jeopardise the attainment of the Union's objective, the commission may well have found a way to stop the Still, if the scheme succeeds in raking money for Labour's government, Muscat may succeed in keeping everyone happy by avoiding any increase in taxation or cuts in expenditure. Ultimately, Labour was elected on a no pain, all gain platform. Moreover, before the election Labour strategically promised to keep the income tax cuts for high income earners foreseen in the PN's last – and unapproved – budget. In fact, fully knowing that they were going to lose the election, the PN may well have left Muscat a fiscal time bomb which risked blowing Labour's edifice mid-way through the legislature. One overlooked question during the electoral campaign was how could Labour manage to square the fiscal circle. The sale of citizenship programme now appears as the answer to a question which Labour evaded before the general election. But this comes at a cost, with Malta unfairly perceived as a bankrupt country in its attempt to undercut schemes devised by bailed out countries like Cyprus. This income may well prove to be the PL's government's 'oil curse', with the easy source of revenue postponing any hard-hitting decisions on taxation and expenditure to the second Muscat government. But in this way, Labour would have literally bought another electoral mandate using money from the IIP. However, this poses a dilemma for the PN. If Labour manages to get the money and invest it in handouts, does it risk being seen as a spoilsport? The PN: how far to go? Simon Busuttil certainly comes out of the current controversy as a stronger leader of an effective Opposition. The controversy has galvanised the Nationalist Opposition, which has proven that it can leave the government in a compromising position despite being nine seats down in parliament. It will face the MEP election endowed with a battle cry which it previously lacked. More than the citizenship scheme itself, the PN has been emboldened by Labour's message to the rest of the world. The PN has also proven without a doubt that it can use its international clout and influence in the European People's Party – the biggest political force in the European Parliament. This cannot but evoke contrast with Labour's diminished European clout after being ditched by its own Socialist partners over an issue of principle. But the Nationalist Opposition now has a dilemma. Faced with the prospect of a government with enough money to buy victory in the next general election, the PN may be tempted to go overboard in sabotaging the scheme to ensure that the money fails to come in… and in the process perhaps forgetting that spoilsports are rarely rewarded by the electorate. Busuttil's contradictions Surely the position of PN MEPs in the European Parliament was as a legitimate one. Most Italian, French and Hungarian socialist MEPs took the same position with regards to their governments as the National-