(18:20. Adds note below)

Someone known to me was at the Commission briefing on their 6 monthly report in the presence of Edward Scicluna still shaken from being woken up early yesterday with news Ali Sadr had been detained. Here’s a summary of today’s proceedings.

At the European Semester (lavish) breakfast meeting, an upbeat introduction by Edward Scicluna, was quickly followed by glowing praise of Malta’s economy by (the European Commission’s) Director Szekely.

Relative to other EU countries, given its first mover advantage in gaming and so forth, Malta was a “star”.

But it quickly became clear that this was a foot-in-the-door technique from the Commission’s part, opening the audience’s hearts and minds for the main message that was to come: that all this is at risk, that Malta risks ruining its reputation, spoiling its business model that its infrastructure cannot cope, and that perception of corruption was worrying.

A cursory glance at the report that all participants were given, said it in no unclear terms: “key challenges mostly concern its longer term sustainability”.

Here are a few other snippets, quoted verbatim from the report:

  • “Enhanced supervision in the financial sector is an additional important factor to safeguard financial stability and preserve Malta’s attractiveness and good reputation as investment destination”
  • “Ensuring effective financial supervision remains a challenge.”
  • “House prices have surged and deserve continuous monitoring”
  • “A large gender employment gap persists”
  • “Skills shortages have become very pronounced.”
  • “Basic skills attainment among young people is still weak”
  • “Single-earner households and the low-skilled face substantial poverty risks”
  • “Shortcomings in the judicial and anti-corruption framework affect the business climate”
  • “Corruption is perceived as a problematic factor for doing business in Malta”
  • “Severe traffic congestion constitutes a barrier to investment, and generates significant external costs”

By European Commission standards, these are very, very direct words.

This was a clear call for cleaning up corruption, financial regulation, infrastructure and social issues stemming from an obligation under Regulation (EU) No 1176/201.

As though not enough, these issues were echoed by speakers from the floor.

In the short time available notwithstanding the very stiff setting, there were at least three very direct questions. On corruption, one participant asked the Minister of Finance how government would be reacting to the Pilatus scandal and to the demand for whistle blower status for Maria Efimova and Jonathan Ferris.

On governance, one participant asked about the impact of positions of trust ever increasing positions of trust on Malta’s productivity and efficiency.

On environment and sustainability, one participant asked about the lack of forward urban planning and the continuous degradation.

What were the Maltese governments’ reactions? On the issue of whistle blowers, it was a terse “No comment”.  On the issue of political appointments, Prof Scicluna gave a rather glib answer, protesting that he had retained staff in the FIAU. But it was the answer to the answer on urban planning that, perhaps, came closest to the truth.

The situation argued the Professor, required the government to continue “muddling through”.

Editor’s note

Since someone asked it is perhaps fair to clarify that the words ‘You risk losing it all’ in single quotes in the heading are a summing up of the sense of the Commission’s message and not a quote of direct speech.

Meantime someone sent me this additional comment from today’s proceedings:

“You may wish to add the reply to the question about what the government will be doing regarding Ali Sadr and Pilatus Bank… Minister Edward Scicluna said ‘the US, a country with so many resources, took five years to carry out the necessary investigations to indict him, and you want us to react in a few hours! Come on, it’s not fair!’.