Many of Malta's 400,000 citizens lack faith in their politicians, police and state officials. That was made clear at a demonstration in memory of the murdered investigative journalist Daphne Caruana Galizia that took place this weekend. The protesters' main demand was that the chief of police be replaced. For years, Caruana Galizia worked to shine a light on corruption in Malta, from which politicians, the mafia and business leaders benefited. "There are crooks everywhere," she wrote on her blog.

It's not yet known who was behind the bomb attack that killed Caruana Galizia on October 16. Not only do Malta's citizens doubt that the murder will ever be solved, most EU politicians are skeptical as well. Manfred Weber, the conservative group leader of the European Parliament, said that Malta does not have the wherewithal to solve the case on its own, and called for an independent European investigative unit. Although Maltese Prime Minister Joseph Muscat has asked Dutch, British and American investigators for help and put up a 1 million euro ($1.17 million) reward, it was not enough to satisfy everyone in the European Parliament. The Greens, for instance, have demanded that Muscat and his Labor government step down, saying there is simply too much corruption.       

Malta: A mafia island?

Since Malta gained its independence from the United Kingdom in 1964, it has been alternatively governed by the conservative Nationalist and the social-democratic Labor parties. Both parties have very close ties to the island's most powerful families. The lines between police, justice and business are often blurred. Malta's economic success, especially since it joined the EU in 2004, has been largely based on tourism, financial services, tax avoidance models, shell companies and online gambling. The creation and management of virtual currencies like Bitcoin are to follow soon.

Daphne Caruana Galizia continually pilloried what she called mafia-like structures in Malta. She pulled no punches when it came to the government, nor with the opposition. She consistently flooded the offices of the sitting president as well as the opposition leader with injunctions. In her blog posts – incidentally, blogs are the most widely read medium in Malta – she frequently wrote tabloid-style stories about corruption and nepotism on the island. Although she often presented little information to back her claims, should only a portion of the accusations have been true it would be bad enough.

Caruana Galizia's shocking murder, and the threat to press freedom and core European values it represents, has raised the question of whether Malta is in fact a country ruled by laws, and moreover, if it is capable of correcting itself. That is a difficult question to answer. Still, the European Union must, at the very least, begin a formal dialogue with Malta to ascertain whether or not fundamental principles of the rule of law are being maintained in the investigation, prosecution and protection of basic rights.

EU should seek 'dialogue'

Furthermore, the EU must urgently assess its own role in regard to Malta's dubious financial sector. It is no secret the country is a tax haven where some 70,000 companies from around the world are able to drive their tax obligations down to zero. Just last week, the European Parliament presented a report acknowledging that Malta had refused to cooperate with the EU in investigating shady business deals being done by offshore companies. However, the report emphasized that Malta is not alone, labeling the UK, Cyprus, Latvia, Estonia and Ireland as tax havens with close ties to suspicious foundations and shell companies based in Panama.

Caruana Galizia thoroughly reported on the so-called Panama Papers, too. She noted that Prime Minister Muscat's wife was named in the financial leaks, and that Malta's parliamentary opposition leader, Adrian Delia, was evading taxes via accounts in the UK as well. According to Caruana Galizia, money laundering, drug trafficking, prostitution and tax evasion are all parts of Malta's corruption scandal. She pulled no punches, and her family has vowed to continue her crusade.

The EU should take a good hard look at Malta. It cannot force the country to do anything, but it can put pressure on the government nevertheless. The bloc's credibility is on the line. One can hardly accuse Poland's rebellious government or the paranoid Hungarian Prime Minister Viktor Orban of not upholding the rule of law and then willingly turn a blind eye to Malta.