Malta is the smallest economy in the euro zone, yet is has come through the European economic storm in much better shape than many of its more economically powerful fellow member states, and this despite a number of handicaps that might have sunk a country of similar economic stature. For starters, its natural resources are limited, and it imports about 80 percent of its food and most of its energy. Doubtless aware of its economic vulnerabilities, Malta has been very proactive in the area of taxation, introducing various tax incentive schemes to attract foreign investors, including a citizenship for investment program. Indeed, it has sailed pretty close to the wind as far as the EU is concerned, because member states have to be very careful these days not to fall foul of state aid rules and other laws designed to prevent member states from distorting the sacrosanct single market. Unsurprisingly, the citizenship program did actually attract an investigation by the Commission. MEPs felt that the scheme “abuses” the rights acquired by the island through its EU membership, and undermines “the very concept of European citizenship.” But, somewhat surprisingly, to my eyes at least, the scheme was given the all clear in 2013. However, small island states like Malta, devoid of natural resources, have to take a risk now and again to ensure their economic futures, which is why it gets an encomium.

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Malta