The government is planning to axe Edward Scicluna from his top role at the Central Bank in the coming week, should the governor continue to refuse to resign following a damning court decision.

The Cabinet will likely make the final decision during a meeting on Tuesday, Times of Malta is informed.

Scicluna is expected to be replaced by Alexander Demarco, who currently serves as the bank’s deputy governor. The Central Bank of Malta Act and European Central Bank legislation both state a governor can only be removed if found guilty of serious misconduct or if he no longer fulfills the conditions to perform their duties. Sources said the government will base its legal reasoning on the argument that Scicluna can no longer perform his duties because he will be facing trial.

Government sources conceded that the former finance minister might have a legal argument to challenge the decision but added the government plans to go ahead anyway.

The government will base its legal reasoning on the argument that Scicluna can no longer perform his duties because he will be facing trial- Sources

Scicluna, along with former deputy prime minister Chris Fearne and 13 others, is in court over charges of fraud, misappropriation and fraudulent gain related to the privatisation of Gozo, Karin Grech and St Luke’s hospitals.

All the accused learned on Wednesday that their case will go to trial after Magistrate Leonard Caruana ruled there is enough evidence ‘at first glance’ for the case to continue. All have insisted on their innocence.

Following that decision, Prime Minister Robert Abela strongly indicated that Scicluna should step down as governor.

“The correct decision for the Central Bank governor can be seen from the example set by the former deputy prime minister, Chris Fearne and the example set by permanent secretary Ronald Mizzi. I believe good sense will prevail. I believe the national interest will prevail, as will the interest of the sector currently overseen by Professor Scicluna,” Abela had said.

Alexander Demarco is expected to be appointed to the role.

Fearne resigned from the Cabinet as soon as charges were filed against him two months ago. Mizzi resigned on Wednesday. But Scicluna has refused to budge, telling Times of Malta on Thursday morning that his position remained unchanged: “I will abide by the EU treaties. We [the Central Bank] are an independent institution. We have our own rules.”

Since the arraignment in May, Scicluna has maintained that neither the government nor the opposition can compel him to resign. As he dug his heels, the government upped the ante: on Friday he was removed as deputy governor of the Malta Financial Services Authority.

Sources said they feared Scicluna will not change his position and is prepared to take on the government, potentially leading to an embarrassing legal battle.

The position of CBM governor is one of the most delicate jobs in Malta, since it requires not only a deep understanding of economic policies and financial systems but also an unwavering commitment to integrity and independence. The government is planning to pass on that mantle to Demarco, who was appointed deputy governor in 2014, after having joined the Central Bank of Malta in 1984. For most of his career, he worked in the bank’s Economic Research Department as a senior economist.