Malta PM to Quit as Questions Mount Over Reporter Murder

Malta PM to Quit as Questions Mount Over Reporter Murder(Bloomberg) — Malta’s Joseph Muscat pledged to resign as leader after his closest aides were linked to a car bomb that killed an investigative journalist.Muscat, 45, said that public anger over the murder, two years ago, was justified. His closest adviser and economy minister have both been questioned by police in recent days as the inquiry into the killing gathered pace. “We are starting the process for a new prime minister who will continue carrying out the work for this legislature,” Muscat said in a broadcast on Sunday.The scandal shines an uncomfortable light on the European Union’s smallest member, one whose central banker nevertheless shares a seat at the table with the likes of Germany and France setting the euro-area’s monetary policy.At a time when further expansion is being questioned, the slow drip of negative headlines has refused to go away for a nation that is also on the front lines of migration and further complicates the job of the EU’s newly-appointed executive arm. The long-festering scandal raises deeper questions about accountability and governance in the island nation, and beyond.The journalist Daphne Caruana Galizia was investigating suspicious payments by a local power company at the time she was killed and the European Central Bank has raised broader concerns about money laundering in Malta.“I kept my word — not only do we have three persons accused of this murder but, also now, someone accused of being the principal person behind this killing,” said Muscat. He was first elected prime minister in 2013 and said he will stay in office until his Labour Party has chosen a successor in a process starting Jan. 12.Pressure on Muscat to step aside has grown since businessman Yorgen Fenech was arrested last month in connection with the Caruana Galizia’s murder in 2017. Fenech was suspected of trying to flee the country when he was apprehended on his yacht. He has denied involvement in the murder.Protesters in the capital Valletta threw eggs and coins at lawmakers from the ruling party, the Times of Malta said. Demonstrations intensified on Monday, with hundreds gathered around the parliament to ask for Muscat’s immediate resignation, Ansa reported.Three men have been arrested for the assassination, but they have yet to identify the person who allegedly hired them. Police gained evidence against Fenech after the recent arrest of a man for an unrelated crime who offered evidence in return for leniency.The government earlier rejected Fenech’s request for immunity from prosecution in return for revealing information about the murder plot and about alleged corruption involving Muscat’s former chief of staff Keith Schembri, among others, court filings showed, according to Reuters. Schembri has denied any wrongdoing, the agency said.Malta isn’t the only weak link in Europe’s financial and legal controls.Danske Bank A/S, Denmark’s biggest lender, saw suspicious funds funneled through its branch in Tallinn, Estonia, from 2007 to 2015. Allegations have also emerged against Swedbank AB, Sweden’s oldest bank and Helsinki-based Nordea Bank Abp.(Adds anti-government protests in seventh paragraph. A previous version of this story corrected the second paragraph to say that economy minister, not finance minister, was questioned)To contact the reporters on this story: Mathew Carr in London at;Alessandro Speciale in Rome at aspeciale@bloomberg.netTo contact the editors responsible for this story: Reed Landberg at, Flavia Krause-Jackson, Ben SillsFor more articles like this, please visit us at©2019 Bloomberg L.P.

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