Thursday, 26 December 2013

Post-Christmas reflections

Reflection No. 1 - Citizenship

The changes made to the Individual Investor Programme, generally referred to as the citizenship scheme, address  all objections raised by civil society and the private sector.

The scheme has been capped at 1800 applicants which will defuse all apprehensions from EU partners that Malta is abusing its EU membership acting as a conduit for wholesale back-door admissions of non-EU persons.

The need to make hard investments in government bonds and immovable property worth an additional EUR 500,000 on top of the EUR 650,000 fee that has to be paid on acceptance, establishes a minimum level of bonding between the new citizen and his new country that can only increase over time as the benefits of citizenship grow on successful applicants.

The Opposition has remained quite isolated objecting to the Scheme on the basis that citizenship should only be granted after a period of some five years involving minimum residency conditions.

Any such condition would have killed the Scheme before it is born considering that other EU countries offer similar benefits ( i.e. very light residency rules which lead to full citizenship within five years) without the need to pay EU 650,000 up front.    Other EU countries only oblige applicants to buy property as low as EUR 250,000 and to visit just once a year and then after some five years during which they would still enjoy Golden Visa to travel throughout the EU without hindrance, they would qualify for full citizenship.

Why did the PN choose to isolate themselves rather than take credit with government for making the Scheme more acceptable?   I cannot help feeling that the PN objections to the Scheme were not based on principle, but on fear that its success will reward Labour government with substantial resources that would permit it to deliver and go beyond what it has promised in its electoral manifesto.

Reflection No.2- Unemployment can't wait

Can you imagine what sort of Christmas was that of the youth unemployed in Spain, Italy and Greece where 50% of them are without a job, and worse still cannot see any reasonable prospect of getting one in 2014?

Unemployment can't wait.   The recession in Europe crisis countries is now entering its sixth consecutive year without an end in sight.   A whole generation is being lost and as these youth will vote when elections come along who can blame them if they lose faith in all traditional parties of the left or right and go to the  populism of extreme parties that dangerously offer mirage solutions that will undermine democracy and social cohesion, in short will destroy the basic values that Europe stands for.

Germany is forgetting that a Versailles approach by the international community served on it after the WWI led to the rise of extreme Nazism that led to the atrocities of WWII.   It was the Marshall Plan after WWII that brought peace, stability and prosperity.

Forgetting what worked and what has not worked is leading Germany to escape their solidarity obligations to help countries in distress not only to keep them in the Euro but to restore them to health and to facilitate their restructuring programmes.    50% youth unemployment, banks that cannot lend to small industries that create jobs cannot be a fair way how to restructure problem countries back to health.

The Banking Union cannot wait 10 years to build up the funds to render the safety of banks in periphery country unquestionable.  These banks have to be recapitalised here and now with shock and awe recapitalisation which if necessary have to be funded by monetisation by the ECB.   If the rules do not permit that let's change them.    Such monetisation can be reversed when these banks become commercially attractive again and the private sector can become interested in buying back their equity.

The problem is here and now.  The solution to 50% youth unemployment cannot wait 10 years purely not to expose German taxpayers to any funding risk, forgetting how much they were helped when they needed.

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