The EU Parliament today is set to discuss Malta in the wake of the Panama Papers, as well as the rule of law.

The item on the agenda is listed as: “Council and Commission statements - Panama Papers follow-up and the rule of law in Malta.” Following statements by the Council and the Commission, MEPs will then in turn have their say.

Prime Minister Joseph Muscat has confirmed that he will head to Strasbourg for this session. A well informed EU Parliament source previously told this newsroom that the reason for this debate is not directly the financial services sector, but would rather be on political accountability and the rule of law. It is, however, unclear how the result of the Maltese elections could affect this, and whether MEPs would now choose to hit Malta’s taxation system, given the release of the Malta files. Sources in the European Parliament did indicate however, that for those MEPs who are well versed in the Maltese situation, the elections won’t change anything, however did stress that it is likely Malta's taxation system would be brought up by some.

Prime Minister Joseph Muscat also chose to reappoint the man at the centre of the Panama Papers scandal, Konrad Mizzi, as a minister, and also chose to keep Keith Schembri in his current post as Chief of Staff despite ongoing magisterial inquiries. Mizzi and Schembri were both found to have acquired companies in Panama, and had placed them into New Zealand Trusts. Schembri also had a company in the British Virgin Islands.

The lack of police investigations from the moment the Panama Papers revealed Konrad Mizzi’s and Keith Schembri’s structures, and the fact that it had to be a Magistrate to launch the inquiries after documents were taken to the courts regarding alleged kickbacks to Keith Schembri for the IIP scheme could also potentially be brought up. This, sources said, could open the door to Malta’s citizenship scheme being questioned as some MEPs are still against it.

The allegations regarding Muscat’s wife, Michelle, owning Egrant (another Panama company) and the magisterial inquiry in that regard could also potentially be brought up.

It is unclear how PN MEPs will speak at the council in relation to Konrad Mizzi and Keith Schembri, however while vocal on these issues they have always stressed that they will defend Malta’s taxation regime. Whether Muscat will choose to blame PN MEPs for the possible criticism that is to come Malta’s way following the EU Parliament’s focus on Malta which resulted from Maltese politicians being mentioned in the Panama Papers also remains to be seen.