Cyprus Mail
Cyprus

Government hints at changes to foreclosures bill

By Elias Hazou

THE GOVERNMENT is open to feedback from the parties that will improve on its foreclosures bill, and has already relayed to the troika a number of these proposals, Finance Minister Harris Georgiades said on Thursday.

“We look forward to continuing the dialogue [with the parties] on a parliamentary level. In this dialogue, we as the government are neither absolute nor dogmatic,” Georgiades told reporters shortly after a meeting with the European Party at their Nicosia offices.

The meeting with the European Party concludes the round of consultations with the parties; discussion next shifts to the House finance committee, which on Monday begins reviewing the foreclosures legislation.

Parties want the bill amended and the government to renegotiate it with international lenders. The administration has for the first time left a window open for amending the bill, though without “watering down its substance,” as the deputy government spokesman Viktoras Papadopoulos put it.

“We shall put to the troika proposals on which there is a consensus or a majority opinion. We may re-discuss with the troika to see whether they accept certain proposals that improve the text,” he said.

The European Party proposes, among others, total debt forgiveness on a mortgage once a property has been foreclosed and auctioned off. This, they argue, would force banks to seek the highest possible price for a property under auction and thus avoid fire sales that would drive down real estate prices in general.

The party also wants the government to submit its insolvency bill together with the foreclosures item, in order to safeguard small non-viable borrowers who have no income or assets.

The government must also carry out macro- and micro-economic studies of the impact of foreclosures on borrowers and banks alike.

It was not clear whether the government would be asking its international creditors for an extension. As it stands, the government has not mustered anywhere near the required support for the bill’s passage in the plenum, and the clock is ticking – the item must be passed by the end of the month, the troika has said.

In particular, the government needs former allies DIKO to come on board, but that appears a hard sell for the moment.

One longstanding demand put forth by DIKO – that the government renegotiates the definition of non-performing loans – was again dismissed outright by the finance minister yesterday.

There is a single definition for NPLs throughout the euro area, and Cyprus cannot be the exception, Georgiades said.

Main opposition AKEL has called the government bill “disastrous,” warning that thousands would be left homeless.

Hitting back on Thursday, ruling DISY said the clause governing sales of property was included in the memorandum signed with the troika by the AKEL-led administration back in November 2012.

“AKEL has a short memory,” DISY said in a statement.

 

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