The financial services sector accounts for 11% of Malta’s GDP. By contrast, tourism and the construction industry contribute 13% each. Over 12,000 people are employed in the financial sector.
These figures confirm that the sector represents one of the pillars of the Maltese economy. The development of financial services as a mainstay of the local economy was the creation of a PN administration. The labour Opposition at the time contributed effectively to the creation of the required legislative framework.
The sector faced an existential threat as a result of the deficiencies identified by successive MONEYVAL reports. The Opposition would have us believe that these problems began with a Labour administration in 2013. PreviousMONEYVAL reports show that this is far from the truth. The issues flagged were systematic shortcomings going back decades.
One could hit back by mentioning that high ranking PN members, or others close to the party, were involved in serious infringements, leading to fines being imposed and an ex minister barred from holding any directorship for two years. Or that a former PM and a very close party friend sat on the board of Nemea Bank, whose assets were placed under controllership by the MFSA. But now is not the time for such tit-for-tats.
The 2019 MONEYVAL report acknowledged that the authorities had demonstrated a broad understanding of the vulnerabilities within the system but called on them to strengthen the practical application of their measures to combat money laundering.
Now is not the time for such tit-for-tats.
The same statement was made in 2012.
Blacklisting would have proved catastrophic, resulting in significant loss of income and mass layoffs. The government was determined to take the necessary action to safeguard the sector. Failure to address the highlighted deficiencies was not an option.
On the other hand, there is no doubt there are countries who are envious of Malta’s success in this and other sectors. What irks me and, no doubt, most Maltese irrespective of their political affiliation, is that those intent on harming Malta’s interests find the collaboration of elements within the PN. Malta’s ‘representatives’ in the European Parliament never lose an opportunity to put Malta in a bad light.
Prime Minister Abela took over the helm at a time of political turmoil. A couple of months later he was faced with an unprecedented pandemic which wreaked havoc on the global economy. Notwithstanding these tough challenges, he was determined to address issues which previous governments had swept under the carpet and introduced reforms in various sectors.
He strengthened the institutions tasked with regulating and monitoring the financial services sector, namely the MFSA and the FIAU. He introduced measures recommended by the Venice Commission to strengthen the rule of law. He gave up his right as Prime Minister to nominate the members of the judiciary.
PM Abela strengthened the institutions tasked with regulating and monitoring the financial services sector, namely the MFSA and the FIAU.
Let us not forget the hypocritical braying of those elements who have hijacked the PN, who would have us think that these issues were the making of this government. These issues were mostly a colonial legacy. Successive Nationalist administrations unashamedly exploited them during their unprecedentedly long time in government. The PN MEPs upped the ante in international fora, stepping up the pressure on their own country, yet hypocritically endorsing the despots of Hungary and Poland who formed part of their EPP group.
Malta’s efforts in addressing the issues raised by MONEYVAL and in strengthening the rule of law were acknowledged by the authorities. The news that the country had passed the MONEYVAL test was greeted with great satisfaction by those of goodwill, whatever their political creed, though I am in no doubt that there was a small number of fellow Maltese who were disappointed with the result.
As I write, Malta awaits the FATF’s decision whether to grey-list the country despite the country having zero ‘no compliances’. The US, UK and Germany are applying great pressure to include Malta in the list, for reasons which may have nothing to do with the issues highlighted by MONEYVAL.
Herein lies the importance of a show of unity. The Opposition might gain some kudos in case of a negative results. The negative effects do not distinguish between Labourites and Nationalists. History will judge the Quislings (Vidkun Quisling, a Norwegian who collaborated with Nazi enemy occupying forces, whose name has become a synonym for traitor).
Malta needs a strong opposition. Criticism should be constructive, yet responsible and loyal to the country “whose name we bear”. Thus, a final word of advice to the PN from former UK PM Winston Churchill who famously said “When I am abroad, I always make it a rule never to criticise or attack the government of my own country. I make up for lost time when I come home.”