Cyprus Mail
Cyprus

‘A shame to turn back’ if foreclosure bill not passed

Interior Minister Socratis Hasikos

By George Psyllides

IT WOULD be a shame for Cyprus and its people to be led into dire straits because it failed to pass the foreclosures bill, Interior minister Socratis Hasikos said yesterday, as opposition parties dug their heels deeper, threatening to reverse the progress made after last year’s economic collapse.

Former coalition partner Nicolas Papadopoulos of DIKO even suggested yesterday that the government should consider borrowing from the markets if the bill was rejected.

Approval of the foreclosures bill is a condition for the disbursal of the next tranche of bailout funds from the troika of international lenders.

Hasikos said a lot of effort has been put in by the government but mainly the people, to pull the country out of the economic rut it found itself in last year when it was forced to close one bank and seize deposits to recapitalise another – Bank of Cyprus (BoC) – to qualify for a €10bn bailout.

“And we are in the pleasant position to say with certainty now that the banking sector is not in danger. Proof of this is the recapitalisation of BoC,” Hasikos said.

On the state finances, Hasikos said “we spent what we earn and not more. It would be a pity and unfair for Cyprus and its people if we do not succeed in concluding this bill and be led to new adventures, which all of us will pay for dearly.”

Main opposition AKEL, which had proposed dropping out of the eurozone and returning to the Cyprus pound at the height of the crisis, has said it would be voting against the bill because it did not secure peoples’ primary homes.

This was the party that agreed the first bailout agreement, which included foreclosures. It did not conclude the deal, however, managing to pass the time-bomb onto the current administration.

“The memorandum they signed provided a 15-month to two-year procedure max,” Hasikos said. “We have improved this … and the duration of the procedure, especially for primary residences, exceeds two years by far.” It was closer to three years, he added.

Finance minister Harris Georgiades said amendments could be made to the bill as long as the substance was not changed and they were approved by international lenders.

He said some suggestions could be adopted, but others were harder to push through. Like the one about writing the balance of a debt off when the property was sold.

If the balance is €10m and the sale collected €1m, “I can’t imagine one recommending writing off nine million euros,” Georgiades said.

The minister said the bill would serve as a tool for big debtors, reiterating that primary residences were exempted fully until the insolvency framework came into force early next year.

DIKO’s Papadopoulos, who changed his tune regarding the bailout terms after he left the coalition over disagreements on the Cyprus problem, insisted that the bill would allow banks to foreclose properties en masse.

Speaking on a state broadcaster lunchtime show, Papadopoulos said banks would use it to threaten people to agree to restructure their loans or lose their homes.

When the presenter pointed out that the bill was conditional for the next tranche of around €460m, Papadopoulos suggested the government could borrow from the markets like they did recently.

“They can go borrow. Where’s the problem?” he said.

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