panama city.jpg
Photograph: EPA/ALEJANDRO BOLIVAR

Malta's parliament was on Monday debating a motion of no confidence in the government over Prime Minister Joseph Muscat's failure to sack a minister and his chief of staff, who are implicated in the Panama Papers affair.

"Today we have a government trapped in the vice of corruption, a government that is impotent in the face of corruption and a prime minister who is doing nothing about it," opposition deputy leader Beppe Fenech Adami told parliament in the opening speech. 

But the government is expected to survive the vote on the back of a nine-seat majority, with many parliamentarians already saying they would back Muscat's Labour government.

Energy Minister Konrad Mizzi and the prime minister's chief of staff Keith Schembri are named among those who set up two offshore trusts in New Zealand in 2015, which allegedly were to be linked to a secret Dubai bank account and to two Panama companies that the pair set up through the legal firm Mossack Fonseca.

Having an offshore account is not illegal as long as it is declared to tax authorities.

Opposition leader Simon Busuttil has questioned whether there is a connection between Mizzi's Panama holdings and the sale of Malta's energy provider to a Chinese company, a new gas plant awarded to the ElectroGas consortium, and the privatization of two hospitals, among others.

The EU's smallest state has witnessed street protests, but Muscat said he will only take a decision once an internal investigation is concluded. 

Mizzi, the only sitting member of an EU government named in the Panama Papers, has admitted that the choice of Panama was "an error of judgement" and has offered to close his Panama company in the interest of transparency.

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