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16th Apr 2024

Malta PM calls snap election over offshore scandal

Malta's prime minister Joseph Muscat has called a snap election for 3 June following allegations his wife owns an offshore firm in Panama.

The vote will take place during Malta's EU presidency, which ends on 30 June.

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The Labour leader told a crowd in Valletta on Monday (1 May) that the accusations against him and his family were baseless.

"Everybody knows about the attacks made in the past few days on me and my family. I have nothing to fear because truth is on my side and I am clean," he said.

The scandal erupted after Maltese blogger Daphne Caruana Galizia claimed Muscat's wife Michelle held shares in Egrant Inc, a firm named in last year's massive data leak from Panama-based Mossack Fonseca law firm.

While it is not illegal to hold an offshore account, it can be used to hide assets from tax authorities.

Such revelations have already seen Iceland's prime minister resign from office.

Nationalist Party (PN) leader Simon Busuttil has said Muscat must also step down.

The leaked cache of papers did not show the owners of Egrant, but instead revealed links to a Malta-based auditing firm Nexia BT.

An inquiry in Malta has since been launched to find evidence tying Egrant with the prime minister and his wife.

Muscat told Maltese media that he would step down from office if the inquiry revealed any ties.

"I am confident the inquiry will not find anything, because I know there is nothing to find," he said.

Muscat's chief of staff Keith Schembri and Labour minister Konrad Mizzi held shares in other firms also managed by Mossack Fonseca through Nexia BT.

Both Schembri and Mizzi had set up the secret companies after they took office in March 2013. The two at the time had also been negotiating an energy deal with Azerbaijan.

Galizia in her blog said large sums of money had been moved between bank accounts in Azerbaijan and accounts held by Egrant Inc. and the offshore firms belonging to Schembri and Mizzi.

The shady dealings sparked large demonstrations in Malta last week with thousands reportedly taking to the streets against corruption.

A delegation of MEPs from the parliament's Panama tax inquiry committee had visited Malta earlier this year.

Schembri, along with the Nexia BT accountants who set up the offshore accounts, refused to meet them.

Far-left Portuguese MEP Miguel Viegas, who was among the deputies in the delegation, said at the time that the Panama revelations had raised serious questions about ties between Malta's political class and money-laundering.

"Members of both the conservatives and the social democrats in Malta have serious questions to answer relating to their involvement in money-laundering and tax evasion as exposed in the Panama Papers," he said.

The heated life of Malta's politics

While the smallest EU state has been commended in Brussels for its smooth presidency of the Council, domestic politics are characterised by heated polarisation with accusations and insults often being traded.

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