The members of the European Parliament’s committee on the scandal of the Panama papers now on visit to Malta are most welcome. It’s quite obvious that during their short visit, they will be prodded by crude PN manoeuvres to highlight the Mizzi-Schembri affair.

The way I see things, whatever is said or done on this matter, will hardly be relevant to the true mission of the visiting MEPs. As a matter of fact, this relates to the state of financial services in our country, as well as to the impact of the tax system that these islands have established.

Are we running a tax haven or not? Are we allowing money laundering and tax evasion?

The private operators in the financial services sector and the administrators of the Maltese tax system should take centre stage to explain why this is not the case.

I am sure they can give convincing replies to the questions that MEPs will  put. The latter’s main concern is: how can big companies and rich individuals in European countries, be prevented from continuing not to pay their tax dues?

Maltese financial services were not set up to help make such tax evasion happen. Which is why transparency should remain the top guideline in deciding what to do in this sector.

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Financial services

There are legitimate reasons why individuals and companies seek to run their financial transactions from outside the country where they and/or their top owners and investors live.

In an economic system which increasingly develops according to the calls of globalisation, businesses conducted across a spread of different countries and continental zones need to be financially coordinated via one focus. This had better be a place which does not further complicate with its own tax rules, the widespread background of different regulations and taxes to which the income and outgo of these financial entities must be subjected.

Small countries are best placed to provide “neutral” tax systems to cover these aims, without creating confusing overlaps with the rest of the tax systems they apply nationally.

It is an exagerrated simplification, I believe, if not a calumny, when small countries get to be labelled as “tax havens” just because they provide such services.

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Electoral timelines

Electoral timelines are becoming paramount in Europe.

Some are forecasting Armageddon: in the form of a huge wave of extreme populism that will take over essential chunks of the EU.

I am not so impressed by this scenario and am more worried by what appears to be a more realistic scenario: extremists will make good gains; these will help to alter the political climate; to counter it, social democraticand other parties will sharpen their popular message, without really providing good remedies. Indeed they will continue with the pursuit of yesterday’s agendas.

This will fuel the disappointment of electorates which require responses to the problems they encounter in their everyday lives. They are less than interested to hear instead about formulae by which the EU will remain strong and in charge.

It would be worrying if that disappointment turns into regret on which extremisms will surf in an attempt to achieve majority support.