Edward Scicluna says he was prepared to go to the European Court of Justice to fight any attempt to remove him as Central Bank governor - and only agreed to step aside temporarily "until I clear my name".
Speaking to Times of Malta for the first time since he reached a compromise with government, Scicluna insisted he remains governor with his full salary.
“Had the prime minister relieved me of my duties, I would have resorted to the European Court of Justice and had I won I would probably have been refunded my lost income.
"I will step aside only for the time being, but I will remain governor until the end of my term," he said.
Scicluna described how he was called in to Castille on Tuesday during a lengthy cabinet meeting. It was convened by Robert Abela with the intention of removing Scicluna after a court ruled there was sufficient evidence for him to stand trial over the hospitals deal.
“I took legal counsel when it became apparent that I was going to be relieved of my duties because that would have been illegal," Scicluna said.
A deal proposed by colleagues
He said the prime minister and cabinet appointed three senior ministers, his former colleagues in cabinet, who were tasked with convincing him to avoid going down the legal route.
Scicluna did not mention the names of the ministers involved but Times of Malta understands they are Owen Bonnici, Ian Borg and Michael Falzon.
“They asked me to consider this proposal. At first, I was reluctant to accept because I am resolute that I was not taking people for a ride.”
Scicluna said that the arrangement was not imposed on him.
He continued: “I would have preferred staying at my desk but at the moment I cannot until I clear my name. It could be a few months down the line, but I will clear it.”
Scicluna confirmed that he will be retaining his salary.
What the law says
Scicluna said that the terms of the agreement respect the autonomy of the Central Bank of Malta and are according to the provisions of the Central Bank of Malta Act (Chap 204).
Article 8(3) (a) of the CBM Act states: “In the event of the absence of the governor, the governor shall designate a deputy governor to perform the duties of the governor… and the deputy governor so designated shall have and may exercise the powers and perform the functions of the governor.”
Alexander Demarco, deputy governor since January 2014, will be filling in for Scicluna.
Scicluna had been adamant all along that the prime minister could not fire him from office, even though he has been charged in court with fraud and misappropriation in relation to the Vitals hospitals case.
“I was not challenging anyone. Every institution is governed by its own rules and conditions and members have duties and responsibilities towards the institution they belong to. The prime minister can ask ministers to resign but he cannot ask them to forfeit their seat in parliament," he said.
As governor of the central bank, Scicluna sits on the governing council of the European Central Bank. “Not even the ECB requires my resignation”, he said.
“In Malta we are not familiar with the role of Central Bank Governor. We never realised how important it is. The EU Treaties, the Statutes of the European Central Bank and even Maltese law are worded in such a way as to prevent governments from playing dirty tricks."
Article 14 of the ECB treaty says that “a governor may be relieved from office only if he no longer fulfils the conditions required for the performance of his duties or if he has been guilty of serious misconduct."
Article 8 (5), of the CBM Act lays down that "The governor and the deputy governors may be relieved of their office only if they no longer fulfil the conditions required for the performance of their duties or if they have been guilty of serious misconduct."
In 2019 the ECJ ruled against the Latvian government when it tried to remove Ilmārs Rimšēvičs from head of the country’s Central Bank.