Joseph Muscat Booming Malta to deliver verdict on scandal-hit PM

Maltese voters head to the polls Saturday to deliver their verdict on a government hit by corruption allegations linked to the Panama papers scandal, but fortified by a booming economy.

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Opinion polls point to Joseph Muscat, Malta's prime minister, retaining power in the upcoming election play

Opinion polls point to Joseph Muscat, Malta's prime minister, retaining power in the upcoming election

(AFP)
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Maltese voters head to the polls Saturday to deliver their verdict on a government hit by corruption allegations linked to the Panama papers scandal, but fortified by a booming economy.

Opinion polls point to Joseph Muscat, the youthful Labour Party prime minister, retaining power. But with 20-30 percent of the electorate undecided as campaigning closed at midnight on Thursday, analysts have not ruled out a change of government.

The election battle has been dominated by the fallout from last year's massive data leak from Panama's Mossack Fonseca law firm.

Millions of its documents have exposed how the firm established offshore companies for wealthy figures from across the globe, allowing them to hold assets out of sight of tax authorities and financial supervisory bodies.

Muscat called the general election a year early after it was alleged his wife Michelle has a Panamanian offshore company and used it for kickbacks from Azerbaijan's ruling family linked to the licensing of an Azeri bank on Malta.

The premier called the claims the "biggest lie in Maltese political history," asked a magistrate to investigate and vowed to quit if any link was established between him and hidden offshore accounts.

That principle has not been applied to his inner circle. Muscat's chief of staff, Keith Schembri, and a government minister, Konrad Mizzi, were both exposed last year as owners of undeclared shell companies established through Mossack Fonseca. Neither has been sidelined.

Budget surplus

Muscat, 43, is a former journalist who has won plaudits for his polished performances at the helm of Malta's ongoing presidency of the European Union.

He won power in 2013, ending the 15-year rule of the conservative Nationalist Party on a pro-growth and socially liberal agenda.

In office, he has enacted legislation introducing gay civil unions and banned doctors from prescribing so-called gay conversion therapy.

Even his opponents credit Muscat with delivering on the economy. GDP is forecast to grow 4.6 percent this year, three times the average of the eurozone, which Malta entered in 2008, four years after joining the EU.

Government finances are in surplus and debt has fallen below the EU ceiling of 60 percent of GDP.

Muscat, campaigning on the slogan "the best days for Malta are yet to come" has promised to leverage the healthy finances by spending 700 million euros ($786 million) resurfacing roads in the country's biggest ever infrastructure project.

Tourism, which accounts for a quarter of output and nearly 30 percent of jobs, is enjoying record visitor numbers and spending, fuelling investment and a construction boom.

Corruption scandals not new

The allegations of sleaze and cronyism however have helped revive the fortunes of the opposition PN under new leader Simon Busuttil.

A sharply-dressed former academic, the 48-year-old says Muscat has damaged the reputation for probity on which Malta's economy depends.

"Those who created the filth and tarnished it cannot be the ones to fix it," he says.

Ordinary Maltese however appear largely unfazed by the allegations swirling around.

Party loyalties run deep with jobs and promotions often linked to political patronage, the independent media is trusted less than elsewhere and corruption scandals are nothing new in the former British colony.

"What do I care what they get up to. What matters is now everyone is working," said Andrew, a taxi driver by day and black economy barman by night who said he would be voting for Muscat.

Hotel chambermaid Irene, who also did not want to give her family name, concurs: "They are all as bad as each other," she said. "I might not even vote this time."

Whoever wins the election is likely to have to deal with increased international scrutiny with Malta's financial services industry and a scheme offering citizenship to wealthy individuals from Russia, China, Libya and elsewhere particularly under the spotlight.

In the run-up to the election it was alleged Muscat aide Schembri had received kickbacks linked to the issuing of passports.

Germany meanwhile announced it was examining evidence that nearly 2,000 Malta-registered companies had been established as vehicles for illegal tax avoidance by major corporations.

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