New calls for Muscat to resign over journalist's murder

They have 48 hours to charge him, but the arrest itself gave weight to suspicion that two of Muscat's top officials may have been involved.

Fenech was the clandestine owner of a Dubai-based firm called 17 Black, according to an earlier investigation by the Reuters news agency.

That firm was to have been used to pay kick-backs of at least €1.8m to Muscat's chief-of-staff, Keith Schembri, and his then energy minister (now tourism minister) Konrad Mizzi, in a corruption scheme involving a new power plant, another investigation, by Malta's Financial Intelligence Unit (FIU), later showed.

And Caruana Galizia had been working on a cache of freshly-leaked emails from the power plant company at the time of her assassination in October 2017.

The pair, Schembri and Mizzi, said earlier they had nothing to do with 17 Black.

And, for his part, Muscat who declined to sack them even after the FIU revelations, continued to defend the pair on Wednesday.

There were no signs they were involved in the murder and "the country's institutions work, they work well", the prime minister told press.

He had given police special instructions to look out for "people of interest" in the case, Muscat added, and "if I had not given these instructions, maybe today we might be speaking of persons of interest who might have escaped", he said.

But for one of Caruana Galizia's sons, Paul, it was a disgrace that Schembri and Mizzi still held high office.

"The bribery scheme involves the prime minister's chief-of-staff Keith Schembri [and] the now tourism minister Konrad Mizzi ... they are still in cabinet," Paul Caruana Galizia said on Twitter.

For her other son, Matthew, Wednesday's arrest was "an overdue, but important development".

"We now expect the authorities to continue investigating Fenech's links [to the Maltese government]," Matthew Caruana Galizia told EUobserver.

And for its part, the Maltese opposition party joined civil society in saying there could be no trust in that investigation if Muscat stayed in charge.

"The prime minister's position is untenable. He must resign now and let justice take its course," Simon Busuttil, a former leader of the Nationalist Party, said.

"Prime minister - you are responsible for this mess. Resign," David Casa, a Maltese centre-right opposition MEP, added.

The outrage at Muscat's handling of the affair was also echoed in wider Europe.

"After two years of inaction ... it's high time the people behind the murder are brought to justice", Sven Giegold, a German Green MEP, said on Wednesday.

Schembri and Mizzi must step down and Muscat must "ensure that the investigation into the murder of Daphne is thorough and free from any political interference", Giegold added.

Dawn raid

Police had intercepted Fenech early on Wednesday morning as he tried to leave Malta on his private yacht.

His Tumas Group co-owns the consortium which was to operate the €450m power plant.

The power scheme involved Malta's two other biggest business dynasties, the Gasan and Apap Bologna clans, as well as Azerbaijan state energy firm Socar, and German engineering company Siemens.

The power project aside, Muscat, in recent years, also created a controversial EU-passport-for-sale scheme used by Russian and Middle Eastern tycoons.

Caruana Galizia had linked his wife and his officials to kick-backs on the EU passport sales.

And the European Central Bank shut down a Maltese lender, Pilatus Bank, at the heart of the affair, over money-laundering allegations, further harming the island EU state's international image.

"Malta needs to move on from being the ... corruption hotspot of the European Union and become a country where justice, the rule of law, and press freedom are entrenched," Giegold, the German MEP, said.

Outside pressure

Fenech's arrest came only after Europol, the EU's joint police club in The Hague, took on a bigger role in the Maltese investigation, an EU source noted.

Informal pressure from EU states' and US foreign ministries, as well as Western intelligence services, and from journalists' parallel investigations might also have been catalysts, the source added.

"Muscat felt cornered and he is trying to contain the situation," the EU source said, when asked why Malta's leader might suddenly have instructed his police to swoop down on the billionaire's boat "after two years of inaction".

Caruana Galizia's murder, using a car bomb, came shortly before the fatal shooting of an investigative journalist, Jan Kuciak, and his fiancee in Slovakia in 2018.

But the then Slovak prime minister, Robert Fico, pledged to step down five days after the killing and its alleged mastermind was charged less than one year later - in striking differences with Malta.