Malta free to sell EU citizenship, commission says

He added that the EU court in Luxembourg has "confirmed" in "several" cases that "it is for each member state to lay down the conditions for granting citizenship."

His remarks came after Malta on Tuesday passed a law to sell its passports for €650,000 each.

The scheme is expected to raise €30 million in its first year and up to €300 million a year when it is fully up and running. It is also designed to attract big spenders and potential investors to the group of islands, which are home to just 420,000 native people.

According to the draft law, which must still be signed by Malta's President, names of the buyers will not be disclosed.

As EU citizens, they will also be entitled to live, work and, if need be, claim welfare, in all 27 other EU nations.

The Maltese opposition has attacked the scheme.

Simon Busuttil, the leader of the centre-right Nationalist Party, said he will strip any buyers of their new passports if he gets back into power.

A Nationalist Party MEP, Roberta Metsola, filed a question to the EU commission which noted "this goes contrary to the spirit of what it means to be a citizen of Europe."

Alternattiva Demokratika, a Maltese green party, said it will "endanger" Malta's reputation as a "reputable financial centre."

Malta is not the only EU country to give perks to rich foreigners.

Portugal's "Golden Residence Permit" gives people who invest €1 million or more the chance to get a passport after five years. Austria, Spain and the UK also sell residency, but not citizenship, to wealthy outsiders.

Meanwhile, the Cypriot President earlier this year said anyone who lost €3 million or more in the EU bail-out can get fast-track citizenship.

Cyprus' previous regime was tougher.

Under a 2007 law, foreigners could get Cypriot/EU passports if they had more than €17 million in a Cypriot bank, lived on the island, did business there and had a clean criminal record.

The rules did not stop the scheme from attracting shady people, however.

In mid-2012, Cyprus took away the citizenship of Rami Makhlouf, a cousin of Syrian President Bashar al-Assad, after the EU blacklisted him for bankrolling Assad's massacres.

According to the latest EU statistics, the UK grants the most new passports each year (177,565 in 2010), followed by France (114,599), Spain (114,584), Germany (109,594), Italy (56,153), the Czech Republic (36,012), Belgium (29,786), the Netherlands (28,598) and Portugal (23,238).

Malta handed out 1,080 in the same year.

Correction: The original story said Austria also has a passport sale scheme. But the Austrian foreign ministry said it concerns residency only