Cyprus Mail

Think tank concerned over fate of foreclosures bill

By a Staff Reporter
The Institute of International Finance (IIF) believes that the adoption and effective implementation of the foreclosure law is “critical” for the economy of Cyprus, noting at the same time that this is “subject to heightened uncertainty”.
In a July 29 report entitled “Cyprus: Dealing with rising NPLs”, the IIF said that “after solid performance in the first year under Cyprus’ rescue programme, strong political resistance has emerged against the implementation of the agreed strategy for dealing with the high NPLs”.
“A compromise on a revised draft foreclosure law was reached with the troika, entailing an appropriate balance of the rights of both borrowers and lenders,” the IIF added, noting that “enactment of the foreclosure law is a prior action for the completion of the fifth programme review, but it is subject to heightened uncertainty”.
The IIF warned that the adoption and effective implementation of the law was critical for the resumption of bank credit expansion and the restoration of output and employment growth.
President Nicos Anastasiades assured earlier this week that the proposed legislation on foreclosures safeguarded owners primary residence and the legitimate interests and rights of borrowers as well as depositors.
The bill on foreclosures has been approved by the Council of Ministers and is set to be tabled before the House of Representatives for approval on August 11.
Most parties in Cyprus have declared their intention to vote against the bill, but the government has expressed optimism that their concerns will be assuaged and has engaged them individually by scheduling meetings with each party next week, ahead of the critical House vote.
The authorities concluded in March 2013 an agreement with the troika on a €10 billion bailout. So far Cyprus received five disbursements from the ESM/IMF totalling €5.77 billion.

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