Central Bank: Scicluna out, Demarco back

The government has decided not to renew the mandate of Edward Scicluna as governor of the Central Bank of Malta, bringing to an end a tenure marked by political controversy and legal scrutiny. Scicluna, a former finance minister and veteran economist, is expected to leave office at the end of the year, when his five-year term expires.

He will be succeeded in January by Sandro Demarco, a senior central bank official who previously served as deputy governor and who acted as governor on an interim basis when Scicluna temporarily stepped aside last year.

Demarco has now received parliamentary approval following a hearing before the Public Appointments Committee.

Scicluna, 79, had been suspended from his role in 2024 after being indicted on corruption and money-laundering charges linked to a controversial public-private partnership for three state hospitals awarded during the Labour administration of disgraced former prime minister Joseph Muscat.

He has denied wrongdoing and is awaiting trial.

During his time as finance minister between 2013 and 2020, Scicluna oversaw a period of strong economic growth but also faced criticism over governance and oversight.

In court proceedings related to the hospitals concession, he testified that he was not part of Muscat’s inner decision-making circle and said that several major financial commitments had been taken without his knowledge.

Among the transactions scrutinised by investigators are the hospitals deal awarded to Vitals Global Healthcare and an €180 million direct order related to the management of an extension at the St Vincent de Paul elderly care facility.

Scicluna told the court that he had chosen not to resign from cabinet despite disagreements with colleagues, citing the personal and professional costs of stepping down.

“I left a €100,000 job as an MEP and my comfort zone,” he told a stunned panel of judges to justify his lack of political action to stop abuse. “Why should I resign because someone else did wrong?”

After Muscat’s resignation in early 2020, Scicluna resisted pressure to vacate the finance ministry following Robert Abela’s appointment as prime minister, who wanted to appoint his then aide, Clyde Caruana, instead. He later reached an agreement to assume the role of Central Bank Governor, with an annual remuneration package of about €138,000.

Following his indictment in 2024, Abela asked Scicluna to resign from the Central Bank post. Scicluna instead agreed to a temporary suspension while retaining part of his salary – a staggering €6,000 a month for staying home. In mid-2025, the government reversed course and allowed him to return to office for the final months of his term.

Scicluna remains subject to ongoing criminal proceedings, with a jury trial still pending.