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EU Citizenship Goes On Sale, Price War Breaks Out

testosteronepit's picture




 

Wolf Richter   www.testosteronepit.com   www.amazon.com/author/wolfrichter

The huddled masses yearning to breathe free in the European Union drown by the boatload in the Mediterranean. They languish behind bars in detention centers in Greece and elsewhere. They’re maligned, hounded, deported if possible, and sometimes killed. But it’s getting cheaper and easier for the rich.

The path to residency and eventual citizenship has always been paved with money. The more money, the smoother the path. But now in the EU, citizenship (and a passport, one of the most prized in the world) is moving into the realm of not only the super-rich but the run-of-the-mill well-off. EU citizenship has become just another product that strung-out debt-crisis countries can sell in a competitive market by undercutting each other. And Malta just started a price war.

The tiny EU member with a population of 417,000 spread over three islands lies 50 miles south of Sicily, 175 miles east of Tunisia, and a little over 200 miles north of Libya. It’s convenient for foreigners, with English being one of the two official languages.

If you’re from Russia or China or Venezuela or Mali and become a citizen of one of the 28 EU countries, you’ll get a country-specific EU passport, which allows you to establish residency and do business anywhere in the EU. Large international money transfers are less of a hassle. There are all sorts of offshore benefits. And travel around the world is a breeze.

But EU citizenship, though a hot product for those who don’t have it, is not normally considered for sale. You have to invest lots of money in your chosen country. Every country has its own priorities: in Hungary, iffy government bonds; in Ireland, public projects such as education; in Portugal, property. These investments will make you eligible for residency, after which you may or may not be able to get citizenship, similar to programs available in the US.

In Austria, where citizenship is almost impossible to get for normal foreigners, the super-rich are sought after. The government, through paragraph 10, section 6 of the Citizenship Act, can confer citizenship “because of the services already provided by the foreigner and the extraordinary achievements still to be expected of him in the special interest of the Republic.” A Saudi hotel investor and the Russian singer Anna Netrebko reportedly received Austrian citizenship (and passport) in this manner. Few succeed: none in 2012 and only 23 in 2011.

But nowhere in the EU could you actually just go and buy citizenship off the shelf.

Cyprus got close. In 2012, as it was veering toward bankruptcy, it offered citizenship through a “fast-track” scheme to anyone willing to plow at least €10 million in direct investment into the country, which is a lot of money for the average rich guy, just to get a travel document and EU residency. There were also some other onerous criteria, and it wasn’t seen as a good deal.

By April 2013, Cyprus was desperate. Depositors in its collapsed banks were treated to high and tight haircuts. Its offshore financial industry, the mainstay breadwinner, had cratered. Cyprus needed money badly. So President Nikos Anastasiades, in office for only a couple of months, announced that the price of citizenship would be slashed to €3 million, but it would still be tied to investment in Cyprus. It was in part an olive branch he held out to Russians who’d stashed their money in the cesspools of corruption that were the Cypriot banks: they too would be eligible for citizenship if they’d lost at least €3 million.

But that era of tying citizenship to investment and residency is now over in the EU. Malta put it up for sale at 78% off! And you can buy it off the shelf and leave.

The Parliament of Malta passed legislation that set the price for Maltese citizenship at €650,000 for any non-EU applicant. It’s not linked to any residency or investment requirements. People can just come by, jump through some minor hoops, pay, get their citizenship and passport, and then settle in Germany or wherever. Simon Busuttil, leader of the opposition Nationalist Party, warned that Malta could end up being compared to shady tax havens in the Caribbean.

Prime Minister Joseph Muscat admitted that the deal was designed to sell the product. Malta is struggling. It needs the money. He claimed that about 45 people would end up buying citizenship during the first year, for about €30 million in revenues.

No big deal?  Henley and Partners, an international consulting group, was awarded the contract to run the program. The firm specializes “in residence and citizenship planning,” for “wealthy individuals and families, as well as their advisors worldwide.” CEO Eric Major claimed that the program would be transparent. But unlike the Prime Minister, Mr. Major estimated that Malta would sell between 200 and 300 citizenships per year. Hence, at the upper range, nearly €200 million in annual revenues – not bad for a little bit of paperwork. And a lot of money for such a small place.

And if the product really takes off? The price point is advantageous, given what Cyprus charges, and there are hundreds of millions of well-to-do but not super-rich Chinese, Indians, and others who would like to establish an escape route. This could be Europe’s next big thing. It could be HUGE! 

But it’s competitive out there, as Cyprus found out. The Maltese government said that other EU countries were also considering the outright sale of citizenship. This can mean only one thing: downward pressure on prices.

Will Greece offer citizenship for €599,000 each? Perhaps, no questions asked, to be even more competitive? It’s going to be what the bailout Troika and everyone else have been looking for: a phenomenally profitable export product with minuscule input costs and unlimited potential. If it sold 1 million citizenships over the next three years at this price, it would be able to pay off all its debts, bail out its banks properly, allow politicians and tycoons to syphon off €100 billion for personal gain, and still have some cash left to buy some German tanks and frigates. Debt crisis solved!

Unless Slovakia jumps in and cuts the price to €399,000 a piece....

Despite a miraculous economic “recovery,” EU-wide youth unemployment hit 24%. New records were set in Spain (56.5%), Greece (57.3%), and other countries. The warnings from history are clear: governments that allow youth unemployment to escalate, do so at their own peril. Read....  No Country For Young Men

 

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Fri, 11/15/2013 - 19:27 | 4159509 Burticus
Burticus's picture

A second passport will still allow a hapless, unwitting citizen of the United State_ to obtain a foreign bank account or excape and be allowed into a USGubbermint-hating cuntry when $#!+ hits the fan.  Plus, you can't renounce until you have another gubbermint-sanctioned "permission to travel" document, a novel "sheep corralling" creation of the 20th century oligarchs.

I think I'll just patiently wait like a spider as the insolvent zombie gubbermints and their greedy sock puppet "leaders" (cough) fight a bidding war to the bottom.  Remember the saying, "Never try to catch a falling knife!"  Wait for a good "head n' shoulders" pattern, then a pitiful "double bottom" on the monthly chart.

...and don't "act surprised" when you see this featured in the next communique from Simon Black of SovereignMan.com.

Fri, 11/15/2013 - 13:51 | 4158291 steveo77
steveo77's picture

I saw this on a website, and it consists of real screen captures from the ACA website.

Its a good way to understand a few of the realities of ACA in about 5 to 10 minutes.    This is way better than just spouting talking points of "your team"

The website commentary starts as such

1) Massive invasion of privacy even before you can get a somewhat customized budget estimate.

2) You sign away all your rights and privacy for yourself and your family, and actually authorize the Department of Homeland Security to investigate yourself and your family. And this is BEFORE you can get an actual quote.

Check it out

http://nukeprofessional.blogspot.com/2013/11/aca-obamacare-fiasco-real-d...

Fri, 11/15/2013 - 12:48 | 4158045 Don Diego
Don Diego's picture

You can get Spanish citizenship (and EU) if you buy an apartment for 140.000 euros.

Fri, 11/15/2013 - 12:33 | 4157966 tarsubil
tarsubil's picture

Can I sell my American citizenship? $500K and it is yours, no questions asked.

Fri, 11/15/2013 - 19:32 | 4159515 Burticus
Burticus's picture

Pay no attention to tarsubil!  I'll sell mine for "only" 450,000 FeRNs, or just 18,000 ounces of silver!

Oh $#!+, did I just start another bidding war?!

Fri, 11/15/2013 - 12:27 | 4157938 topshelfstuff
topshelfstuff's picture

How long before Spin-Off companies emerge? A company that will Pay the Fee as long as the person entering Signs a contract where they become endentured, virtual servants, the "Buyer" Holding the Papers [ Green Card Equiv.], until the Debt gets paid

Fri, 11/15/2013 - 11:42 | 4157758 squid427
squid427's picture

auctioning off your sovereignty to pay off international banksters, brilliant

Fri, 11/15/2013 - 10:34 | 4157526 nemesis2012
nemesis2012's picture

                WAKE UP PROPLE!!!!!!!!!!!!!!!!YOU ARE ENTERING THE NEW WORLD ORDER!!!.........FORGET FAMILY,COUNTRY,VALUES ,M ORALS. THEY ARE GOING TO MAKE HUMANITY ONE GIANT STEWING SOUPBOAL,,,,,,,,AND GUESS WHAT, YOURE THE MAIN COARSE...........HAHAHAHAHAHAHAHAHAHAHAH............

 

 

Fri, 11/15/2013 - 04:11 | 4156965 Joe A
Joe A's picture

A far bigger problem for Europe and the US (and freedom loving people in general) is the upcoming 'free trade' agreement between the US and the EU. It will put companies' lawyers in charge over national governments. Read and weep: http://www.theguardian.com/commentisfree/2013/nov/04/us-trade-deal-full-...

Fri, 11/15/2013 - 04:17 | 4156969 Martel
Martel's picture

There will be a U.S. corporate boot stamping on a EU citizen's face. It will not work vice versa.

Fri, 11/15/2013 - 04:54 | 4156990 falak pema
falak pema's picture

NSA and Corpocracy, the Oligarchy transnational construct now reveals itself. 

Nation States become OPENLY surrogates to this Anglo saxon Corpocracy construct. 

The World corpocracy club replaces the POPE of old and his Dictatus Papae, the christian theocracy order.

It is now replaced by these new prelates of the Oligarchy NWO. 

God wills it is replaced by the Corpocracy wills it. 

Fri, 11/15/2013 - 00:32 | 4156778 Jorgen
Jorgen's picture

50 million Africans invited to European Union

http://www.express.co.uk/news/world/78180/50million-invited-to-Europe

Fri, 11/15/2013 - 01:33 | 4156861 rationaldemocracy
rationaldemocracy's picture

Europe is more of an Idea these days rather than some geographical entity - Why not let less fortunate people share in the idea?

 

Fri, 11/15/2013 - 13:21 | 4158174 TPTB_r_TBTF
TPTB_r_TBTF's picture

Why not let less fortunate people share in the idea?

 

 

Brugmans defined the European Idea as “the grand stages of the European consciousness, its hopes and its deceptions, its advances as well as its dramatic setbacks."

L'Idee Europeenne 1920-1970

 

Are 50 million "less-fortunate" immigrants an "advancement"

or a "dramtic setback"?

Fri, 11/15/2013 - 06:02 | 4156150 falak pema
falak pema's picture

Understanding the Iran conundrum : Why France plays it alone and contrarian.

The key is : Syrian rebuff of USA by Sauds means they are looking for other military partners to replace USA, if US roll back in ME accelerates post Syria, by doing a hand shake with Iran.

Here is that story : Why France Vetoed The Iran Nuclear Deal - Business Insider

Its all about arms according to Reuters man on the spot. 

PS : As an add on to this situation development : what is evident on the geopolitical scale is that the CHINA's threat, notably in South East Asia and South China sea to US regional dominance, is stretching the reach of Pax Americana resources bigtime. By the looks of it Obama's Pax Americana is changing focus AWAY from ME under fracking hopium and more towards East Asia to counter Chinese presence. Can't be all things to all people when the financial house is burning at home...

These US moves leave a vacuum in the ME region which Putin and now France/EU will jockey to control to fill this space. Bandar Saud is openly fishing along with ally Qatar to invite France as new pillar of military strength in its regional and historical fight with Shia Ayatollah Iran. What a change of Saudi focus that would be and ...what would it do to petrodollar hegemony if EU/France wanted a bigger role for Euro and Yuan...awesome tipping moment in the making! 

I suspect this will also influence the TPP negotiations beginning between USA and EU on which others have posted here.

Thu, 11/14/2013 - 20:43 | 4156140 Kreditanstalt
Kreditanstalt's picture

"Malta could end up being compared to shady tax havens in the Caribbean."

That's an HONOUR.

Thu, 11/14/2013 - 19:16 | 4155878 Martel
Martel's picture

Unless Slovakia jumps in and cuts the price to €399,000 a piece....

Just wait. Albania, Serbia, Montenegro, Kosovo in the pipeline.

Thu, 11/14/2013 - 19:12 | 4155863 SmittyinLA
SmittyinLA's picture

That Romanian Gypsy family with the calico kids will win the citizenship race to the bottom sale contest, whatever the rest of the EU sells for, some Romanian gypsy will be selling citizenship for less, they'll license the entire population for looting everything.

Govt is just a mafia rackett.  

Thu, 11/14/2013 - 19:02 | 4155837 q99x2
q99x2's picture

Where is the best sanctuary city and how do I sign up for benefits?

A little kid came up to me yesterday at college and bummed a buck of my FASFA money from me.

I would have rather handed him a map with instructions along with a story of Huckleberry Finn and sent him on a journey.

Thu, 11/14/2013 - 19:26 | 4155912 SmittyinLA
SmittyinLA's picture

ahh, fafsa student aid, my neighbor is doing that, he got a free mac, I asked him what interest rate his huge student loan ($57,000) was,...?

......interest? 

He didn't know. 

Thu, 11/14/2013 - 19:32 | 4155927 The Alarmist
The Alarmist's picture

He doesn't have to ... Interest rates? We don't need no stinking interest rates.

Thu, 11/14/2013 - 18:57 | 4155818 SmittyinLA
SmittyinLA's picture

You can bet it will soon cost much more to gety rid of citizenship than buy it, look at marriage and divorce and the cost difference , imagine if the ex-wife teams up with the ex-country. 

Thu, 11/14/2013 - 18:35 | 4155747 kieran1968
kieran1968's picture

Throw in some Air Miles and even the flight to Berlin is free.

Thu, 11/14/2013 - 18:27 | 4155736 Navymugsy
Navymugsy's picture

Cyprus will only run you 300,000 euros for a house that snags you an EU id card. Just don't use the banks :)

Thu, 11/14/2013 - 18:13 | 4155706 Winston Smith 2009
Winston Smith 2009's picture

If the US could get 34.3 million people to pay $500,000 each for citizenship, we could wipe out the national debt or 343 million @ $50,000 each or 3.43 billion @ $5,000 each. /s

Fri, 11/15/2013 - 00:04 | 4156726 cynicalskeptic
cynicalskeptic's picture

The US will GIVE citizenship to poor illegals if they're here long enough.... something of an inverse to those countries pursuing wealthy new citizens.   But then it's all about wage suppression here.  If you can't export the jobs to cheap labor countries you bring in cheap labor to do all those nasty dirty jobs Americans won't do for minimum wage.

Thu, 11/14/2013 - 18:28 | 4155738 Navymugsy
Navymugsy's picture

They'll just take it soon enough via our 401K's so no need to donate it.

Thu, 11/14/2013 - 17:42 | 4155627 LawyerScum
LawyerScum's picture

In this world, shipmates, sin that pays its way can travel freely, and without a passport; whereas Virtue, if a pauper, is stopped at all frontiers. --MOBY DICK, Chapter IX

Thu, 11/14/2013 - 17:36 | 4155610 ciscokid
ciscokid's picture

There is a catch there,get the citezenship and then later you get hooked to the tax system.Beware!!!!!

Thu, 11/14/2013 - 17:25 | 4155577 agent default
agent default's picture

Subtle problem.  Take one look at the tax rates in the EU levied on your global income (with some countries being exceptions) and take a look at the latest propositions for an EU wide tax based on citizenship and/or residency and tell me how stupid you have to be to get an EU citizenship.

Thu, 11/14/2013 - 17:18 | 4155557 Urban Redneck
Urban Redneck's picture

Just putting some relevant context up for when I inevitably call Barroso and rest of the Brussels Bunghole Brigade a bunch of dishonorable lying dickweeds in a few weeks (or days as it now may be)...

European Commission President José Manuel Barroso has made it clear that without the free movement of people, Switzerland would not have privileged access to the European market.
In an interview with the NZZ am Sonntag, Barroso said Switzerland currently enjoyed privileges never previously afforded to a third state.

The free movement of people is set to be a source of much discussion in Switzerland over the next couple of years.

At the beginning of 2014, voters will have their say on the first of three referendums, an initiative by the rightwing Swiss People’s Party to limit mass immigration. That will be followed by votes on limiting foreigners and extending the free movement of people to Croatia.

Barroso said he didn’t want to comment on specific Swiss referendums, but instead wanted to highlight the “fundamental significance of the free movement of people for the EU as one of our basic freedoms, next to the free movement of goods, services and capital”.

http://www.swissinfo.ch/eng/politics/Barroso_warns_of_dismissing_free_mo...

Fri, 11/15/2013 - 04:27 | 4156972 the tower
the tower's picture

If Switzerland leaves the free movement of people treaty then the EU will cancel all other treaties, they have made this very clear. So, even if the people of Switzerland vote against it, that won't mean it will happen. Switzerland cannot afford to be kicked out of their carefully crafted treaties with the EU, it would destroy their economy.

The Swiss are very much unaware of how much the EU benefits to their economy, it would hit them like a brick if they are kicked out of the free market.

Also, there is no mass immigration in Switzerland, it's just hype whipped up by the same SVP to further their cause.

If the SVP has its way Switzerland will become an island for extremely wealthy people (mostly foreigners funny enough), with everyone else - including the rest of the Swiss people - becoming their slaves.

Fri, 11/15/2013 - 06:08 | 4157025 Urban Redneck
Urban Redneck's picture

The bergjuden are screwed anyway, unless the EDA can negotiate a quick treaty with Brussels that is (at a minimum) perceived domestically to address the concerns that give rise to the referendums. The intellectually bankrupt europhile parties use the excuse of neutrality to mask their stockholm syndrome, and excuse sovereign encroachment. Where is the thanks, much less compensation, from Brussels for using the SNB balance sheet to to stabilize their baking mess in central europe? Where is the EU respect for Swiss laws regarding the theft and resale (for profit) of bank data, or the domestic (Swiss) arrest warrants for those EU officials who have conspired to break Swiss law?

If Brussels wants treaty consolidation, then there should be treaty consolidation on mutually acceptable terms, or Switzerland should defend itself economically using all available means, regardless of the cost to Brussels.

Since so many of the existing treaties are bilateral the threats about Brussels are just as intellectually perverted to suit ideology as those from the isolationist parties.

And now I need a shower, after having been made to defend the SVP's position...

Fri, 11/15/2013 - 06:37 | 4157040 the tower
the tower's picture

Brussels thanking Switzerland? LOL. 

Switzerland, 8 million people, (6 if all the foreigners would leave) who need the EU to buy their - already too expensive - products.

EU, 500 million people, who couldn't care less about Switzerland and will stop buying Swiss products if an import tax is added to them. Swiss businesses will be forced to leave, most likely to Germany: Munich has its arms wide open. 

Only the rich would stay if the SVP gets its way, and the average Swiss person would be thrown back 30 years.

Forget about the past. There is no way Switzerland can fight this, they will bow to the EU. This is why Swiss businesses completely disagree with SVP. Switzerland is best off with the status quo, they managed to achieve a lot in their benefit. Push it too far and they will lose all.

 

Fri, 11/15/2013 - 08:34 | 4157163 Ar-Pharazôn
Ar-Pharazôn's picture

well mate as a swissman i have to say this:

 

for 700 years Switzerland was here. it is here now. and it will be here in the future.

 

you're underestimating really much the swiss people.

 

we didnt bow to Hitler, why shoud we bow to a commy idiot called barroso?

Fri, 11/15/2013 - 12:28 | 4157943 Vigilante
Vigilante's picture

They need to hoodwink the Swiss into the union for da money..!

Fri, 11/15/2013 - 11:18 | 4157674 the tower
the tower's picture

That's exactly what I'm saying. The status quo is good for Switzerland, so why change it. Why pick a fight with the EU just because the SVP has some stupid thoughts that only work well for them, but not for the Swiss people?

Fri, 11/15/2013 - 07:38 | 4157078 Urban Redneck
Urban Redneck's picture

The Germans are lazy overtaxed socialists, no Swiss businessperson with IQ above freezing (in Kelvin) would consider that shithole, except for outsourcing functions to take advantage of .gov financing support courtesy of German debt serfs (who have been well condition to lie back and enjoy the ass raping). If you want want market access to the EU, there are plenty of other jurisdictions in the EU with more reasonable tax regimes that guarantee market access.

What the Swiss need to recognize that they are already running the world's largest actively managed f/x hedge fund and treat it as a SWF, as SWFs are as legitimate a tool of statecraft and achieving foreign policy objectives. They can fight it and they can win. Bitch Boy Barroso and isn't going to waste all that capital that Mario brags about "investing" over market access for tiny Switzerland, and if he tries to, Achleitner will tell Merkel to leash him.

qui audet adipiscitur

Very un-Swiss, but very banker. Unfortunately the Swiss are neither good bankers, nor conservative bankers, they're merely slow herd bankers...

Fri, 11/15/2013 - 06:56 | 4157050 the tower
the tower's picture

TTIP (Transatlantic Trade and Investment Partnership) is going to strip us from any rights we have left. Does Switzerland really think they can push their cause? The best they can do is sit tight, and not stir things up. They might just be better off than the rest of us if that's their strategy. Wich - by the way - is a very Swiss attitude: take it slow, don't rock the boat, Swissness at its best. Which SVP is not...

Fri, 11/15/2013 - 07:55 | 4157086 Urban Redneck
Urban Redneck's picture

Unless the Europeans really are eediots, TTIP is as dead TPP. But yeah that's why all the really successful (rich) people in Switzerland aren't Swiss.

The irony being that the SVP needs to embrace all that it despises if it actually hopes for victory in the larger game.

Fri, 11/15/2013 - 08:36 | 4157167 Ar-Pharazôn
Ar-Pharazôn's picture

do you know blocher or the "EMS chemie"?

Fri, 11/15/2013 - 10:39 | 4157544 Urban Redneck
Urban Redneck's picture

I don't know Blocher but I do know EMS, although the chemical products we sell are actually more in competition with Holcim than EMS, but EMS's capacities might be useful if we switched production from Germany to Switzerland, since building new manufacturing capacity is cost-prohibitive for us and our backup production supplier can't scale up.

Fri, 11/15/2013 - 11:22 | 4157691 the tower
the tower's picture

Blocher is a powerful figure in Swiss politics, and (financial-) supporter of parties like Wilders' PPV and Front National.

His goal has never served the Swiss people, he's a polarizer, typically self serving his billion CHF bank account...

Fri, 11/15/2013 - 11:32 | 4157733 the tower
the tower's picture

PS depending on your political persuasion you will love him or hate him

Fri, 11/15/2013 - 11:30 | 4157724 Urban Redneck
Urban Redneck's picture

I think Ar-Pharazôn was trying to poke holes in my generalization about the rich in Switzerland. There are always exceptions, but the only way to deliver outsized returns on investment is by taking risks or by eliminating them through corruption. Blocher is Swiss, but he's also a pilot, which implies an un-Swiss risk tolerance, just as some of the more successful commodities traders in Geneva are Swiss and they tend to have a very different risk tolerance than bankers in Zurich (or even Geneva).

Thu, 11/14/2013 - 17:14 | 4155541 Dubaibanker
Thu, 11/14/2013 - 16:48 | 4155446 starman
starman's picture

Spain offers permanent residence with the purchase of a house at 250k eu and up. Good deal if you're not in the job market cose there's non!

Thu, 11/14/2013 - 19:18 | 4155889 The Alarmist
The Alarmist's picture

Sounds like a great deal ... right up to the point where your house is expropriated for the good of the natives and you are sent packing.

Thu, 11/14/2013 - 16:31 | 4155393 Gold N Glocks
Gold N Glocks's picture

I'll take Austria for $2000 Alex...

Thu, 11/14/2013 - 19:16 | 4155877 The Alarmist
The Alarmist's picture

Alex:"No, Austria will take you for € 2,000" (That's what, $1m USD these days?)

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