Update 3 | Busutill explains reasons for discussion break-down on citizenship scheme

In a press conference held this afternoon at the party's headquarters PN leader Simon Busuttil said that "sadly" the talks which took place at Castille between himself and the Prime Minister on the citizenship scheme collapsed.

At the press conference, Busutill called on government to "scrap the scheme immediately."

"Our citizenship is not for sale, after all we are taking about our identity. People must strive for a passport and deserve it. They cannot just come here and buy it."

Hinting that the main bone of contention was whether foreigners should be granted citizenship after residing in Malta for five years or a shorter period, Busuttil said that the government failed to address the opposition's main concerns.

Pointing out that the two parties agreed on not revealing the details of the talks, Busuttil said "If the scheme's principles remain unchanged it will only cause more harm to the country's reputation," adding that the PN would not put its gloves down.

Insisting that the majority of people opposed the scheme, Busuttil said "The talks failed because the prime minister insisted on selling Maltese passports. On Saturday (during previous talks on the IIP) the prime minister made a final proposal which we refused because the changes proposed by government were only cosmetic and do not change the principle of sale to one of investment."

He added that if the government goes ahead and issues the legal notice, the Opposition will firmly oppose it in Parliament.

Busuttil said there was no agreement on the scheme because the PN was against the principle of selling passports. "We are against having people coming here, paying and obtaining a passport."

"The government did not accept to include a five year residence requirement and a direct commitment through investment. This was and remains a scheme through which passports are sold," Busuttil said, flanked by the opposition's MPs and officials.

"Although the talks failed we feel that we did our utmost on a new scheme a radically changed scheme from a bad one to a good one. The failure does not take away anything from the fact that we entered the talks in good faith."

The PN leader said the opposition was not in a position to comment on the government's new scheme which will be announced later today. "We will react to the government's changes as they are announced."

Asked whether the two parties reached an agreement on anything, Busuttil said that progress was achieved on some points, such as introducing a capping, however no global agreement was reached.

Busutill pens letter to Prime Minister

Earlier this afternoon, in a letter penned by Simon Busutill and addressed directly to the Prime Minister, he said that the Opposition could not agree to the citizenship scheme proposed by government as it remained one in which Maltese citizenship was simply sold, whilst it bore no long-term investment for the country.

"The Opposition can never agree that citizenship becomes a commodity.  This is a point of principle for the PN," the letter led.

Busutill said that it was 'unacceptable' that persons who have no interest or connection to Malta, "so much so that they need not even step foot in Malta" could be classified as Maltese.

"The only real interest that these people hold, due solely to their financial power, would be the benefits which would come along with being a Maltese citizen," the letter read.

The PN leader pointed out that there were other EU countries, such as Portugal, which offered citizenship to foreigners, but these were tied to residency.

"For instance, England and Portugal require would-be citizens to have resided in the country for six years".

Referring to both Maltese and EU law, which make it clear that a person acquires the right of citizenship after five years of residing in a country, Busutill said that a scheme which did not even request a person to visit the country was 'unacceptable'.

"Your proposal means," the letter read, "that, besides money, there need not be any connection between the person hoping to acquire citizenship and the country he or she is hoping to become a citizen of".

Busutill said that, for the sake of Malta's national interest, the government needed to revise the original scheme which has 'painted Malta's reputation in a dark light', adding that it was his belief that this was also what the people of Malta and Gozo wanted.

Immediately after the unsuccessful talks held with Joseph Muscat at Casille, Busutill said that "we have asked government to pull back the scheme immediately".

Addressing the press briefly after Busuttil on Castille's steps, Prime Minister Joseph Muscat echoed Busuttil's statement and said that talks had failed.

He added that the new scheme would be announced later today.

In recent weeks Prime Minister Joseph Muscat and Busuttil were locked in talks over the Individual Investor Programme.

However, an agreement was always unlikely and the two sides failed to agree on changes proposed by the opposition.

The scheme has been a source of much controversy in the past weeks, with the opposition leader insisting that his position remained one "based on a point of principle: citizenship is not for sale".

The opposition has repeatedly said that unless the scheme is changed it would repeal the scheme once it is government. The PN is pushing for the introduction of criteria, including a five-year residence period and a minimum €5 million investment.

The government has put the scheme on hold and stated that it would not issue any passports to foreigners who pay a €650,000 donation before the secrecy clause is removed.

The citizenship scheme has generated massive international interest, both for the fact that an EU member state was selling passports and access to the eurozone for non-EU nationals, as well as for the potential €30 million that the Maltese government is seeking to rake into its public coffers by 2014.

The Prime Minister has also publicly admitted that the government made a mistake by not listening enough to what the stakeholders were saying on the scheme.

Last week, Muscat also said that he was positive that the government and the Opposition can agree on certain issues.

Finance minister Edward Scicluna has also told members of a European Parliament committee that the number of annual IIP passports could be expected to be capped.