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EU golden visa risk: A hint at membership benefits?

Smaller EU members will suddenly realize the value of membership

As the European Union called for tighter control on so-called “Golden Visa” schemes, analysts rightly asked: Is there an underlying message behind the discussion? This may well serve as a reminder to smaller member states: That strategic benefits of EU membership, such as to sell citizenship and attract economically able migrants, should not be taken for granted. It very well serves as a reminder for smaller nations to allow fair competition and innovation by other EU member states who seek to compete within their economy – or to imagine what life would be like without member benefits.

Indeed some superficial reasons were given to investigate the Golden Visa scheme: “Security checks run on applicants are not sufficiently robust and the EU’s own centralized information systems, such as the Schengen Information System (SIS), are not being used as systematically as they should be,” said the report prepared by the European Commission (EC),  yet there is much more to this, as we discuss below.

Whereas some nations genuinely appreciate the opportunities brought by integration, many fail to appreciate it or reciprocate any value whatsoever. In fact, common sentiment analysis through digital tools – or having an ear on the ground, makes it no secret, that some EU nations who are benefactors, are not particularly interested to provide reciprocal value. It begs the question: In a multi-speed Europe, who are the givers, who are the takers? Examples of sentiment that are not particularly appreciative of what Europe does for members can be illustrated clearly by the following sentiments:

Copycat sentiment in Greece on EU membership:

Welcome to a nation of incredibly kind and hospitable people – when you’re on holiday, not on business. Greece is an economically embattled nation of old people – where the majority of the population will be in their 60’s by 2030 and beyond. The Berlin institute for population development issued dire statistical warnings for 2050.  Greece fails to attract first world investors for some very simple reasons: Firstly, the mayors of some islands, such as Corfu, refuse to remove garbage. Secondly, passive smoking in Greece, is a huge problem since restaurant owners simply refuse to uphold anti-smoking laws. Europeans therefore feel “cheated” when investing in Greece – once they find out that in winter it is impossible to hang out in a smoke free environment and, that after paying property tax, their rubbish will not be removed.

The solution for Greece seems to be selling Golden Visas to Chinese, Russian and Middle Eastern people who can just about afford the 250 000 Euro investment requirement. In turn these investors – who obviously cannot afford London, Monte Carlo or France – are satisfied to accept EU passage through a member that breaches just about all EU agreements that deals with public health and safety.

Yet the average semi-informed Greek will blame EU membership (and the Euro currency) for their economic woes. They refer to the UK’s view of Europe as if it will be a solution for their own country.

The reality is that without the ability to sell access to Europe – i.e. through the availability of Golden Visas, who would really want to invest in a country with a falling, ageing population who view the right to smoke cigarettes  as a “fundamental freedom”? Yes, they smoke everywhere from the police station, to the hospitals and in most restaurants.

Malta and the i-gaming sector:

Welcome to another nation of incredibly kind and hospitable people. Malta is actually one country where a PRO-EU sentiment exists. People seem to understand where their country came from – and where it is headed as a result of EU membership. It also seems to appreciate that the EU provided it with the opportunity to become a silicon valley for Europe. In terms of risk analysis, the previous Betsson group CEO hinted that Malta will acquire technical expertise and a sound ecosystem that is second to none, so that even if favorable tax rates are no longer allowed in the EU, Malta would still attract companies who wish to tap into the talent pool – another lesson learned from Silicon Valley and London.

The EU transformed Malta into a prosperous nation – one that attracts economic migrants at a scale similar to Monte Carlo these days. The country is even considering to enter the CBD cannabidiol industry – produce that will no doubt be sold in other EU member states.

Cyprus: Fintech, Russian and Chinese economic migrants:

Welcome to another nation of incredibly kind and hospitable people. On the surface, Cyprus is doing really well. Fintech is booming – and the country acts as a platform for huge forex and investment platforms. But are they fond of Europeans and how welcome is a European to run a LOCAL business in Cyprus? The fact is that Cyprus is only welcoming to people who run businesses who deal with the outside world. Take a punt at doing business in the country or taking market share from a local business – and you will quickly hit an invisible barrier of protectionism. Cypriots are frank that they assimilate with Middle Eastern people and not the people of Europe. One exception is their perception of closeness to Russia over a shared religion. In Paphos, for example, a British or European start-up in the wedding industry, faced heavy opposition from Cypriot hotel managers who blocked them from participating in wedding services – as the prevailing attitude is that “Economic opportunities in Cyprus is for Cypriots”. It is entertaining to observe how the Paphos business community is split in two camps: British entrepreneurs doing business with each other – and Cypriots. The only mediating power seems to be sizeable Israeli and British travel agents that are able to insist that Cypriot hotel chains open op to other service providers.

Unlike the Netherlands who made a bold BREXIT statement to UK citizens who fear their future in Europe, the prime minister, Anastasiades was quite supportive of the EU, saying to British expats that he has no answer on their future fate, as it will be dealt with “at a European level”.

Conclusion:

At an OECD level, many rules fix the game between countries. The same happens at an EU level. There is no shortage of multi-national instruments to deal with security concerns. It would seem that there is a determination to keep Europe together – and that hinting at stricter control of Golden Visas, is a mere reminder to members: Do not forget that EU membership comes with it’s benefits too. How this will impact populist sentiment in Europe, remains to be seen. We may not live in an ideal Europe at all – and a lot of reform is required. But a good starting point is for member states to realize: a two-way street is the only way forward. The days of the taker nations could be numbered.

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Adriaan Brits

As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment and business. He covers mostly topics related to his qualifications. He is a specialist trainer in Advanced Analytics & Media. He also writes for Jpost.com, BestTechie, CEOWorld Magazine and other media outlets.
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