Grey-listing of Malta in the wake of the Moneyval report would be as devastating for the economy as the COVID-19 crisis, the president of the Malta Employers' Association has warned.
Malta last year failed an expert review of its money-laundering regime by Moneyval - a Council of Europe group - and was given an October deadline to get its house in order.
"Malta should never have come to a state where Moneyval is breathing down our necks to put our house in order. Our financial services and igaming sectors built a formidable competitive advantage over the years through a well-designed combination of fiscal incentives, reputation building and overall infrastructure. Unfortunately, Malta’s image has been devalued as the country has been rocked by a successive series of scandals that have drawn the attention of the international media. The consequences of being grey-listed by Moneyval could be as devastating as the COVID crisis" Doris Sammut-Bonnici told the MEA annual general meeting.
"No matter how resilient our economy is, it will not be able to withstand a contraction of the financial and igaming sectors, an ailing tourism industry and a fall in manufacturing output simultaneously. Businesses and people will suffer if this scenario becomes a reality," she warned.
Sammut-Bonnici said hard and radical decisions were needed to restore good governance in Malta's institutions.
She referred to proposals presented by MEA for parliamentary reform and a separation of powers between the legislative and the executive.
Members of Parliament, she said, should not hold positions of trust, especially when it was common knowledge that this practice was there to boost the income of the MPs of the governing party.
The association was also insisting on transparency in the engagement of persons of trust, she added.
"How can employers take the government seriously about promoting pay transparency when it refuses to disclose the packages of persons of trust who are paid from taxpayers’ money?’
The MEA president said it had also become evident that good governance depends on the separation of party financing from corporate donations or coercive practices like door-to-door collections. The MEA is proposing partial state funding to political parties instead.