Cyprus Mail

‘Stepping stone’ to allay fears

President Nicos Anastasiades speaking to reporters following the Troodos meeting with his close aides

By Elias Hazou

THE administration will this week unveil a ‘series’ of proposals complementing its foreclosures legislation and providing a safety net to vulnerable groups, President Nicos Anastasiades said yesterday.

“They are coherent specific measures aimed at satisfying the broader sense of safeguarding the rights of not only vulnerable groups, but also those who justifiably need protection,” Anastasiades told reporters after a meeting held at the presidential retreat in Troodos.

Attending the meeting were the ministers of the interior and of finance, the undersecretary to the President and the leader of the ruling DISY party.
It is expected that the measures will be finalised and announced by the Cabinet on Wednesday, and then immediately forwarded to parliament.

Anastasiades said the extra provisions decided upon would address the concerns raised by parties, who are wary of the foreclosures bill leading to mass seizures of properties, particularly people’s primary residence.

Anastasiades declined to disclose any details of these additional measures, saying he needed to brief party leaders first. He would be speaking with them on the phone during the day.

Responding to persistent questions from the media, the President did say that the mooted measures include proposals under the insolvency framework currently being hammered out.

And there would be schemes supporting homeowners who have fallen on hard times and are genuinely having difficulty with servicing their mortgage, he added.

These would include schemes that have already been announced, Anastasiades said. It’s understood he was alluding to a plan enabling people unable to keep up with their mortgage payments to continue dwelling in their home as tenants.

Under the scheme, the state will buy from the banks houses that are up for seizure. Moreover, those eligible and who apply for the programme will also be given the opportunity to buy back their real estate property after five years.

The government has run a cost analysis and determined that it has the necessary funds to finance these schemes, Anastasiades said.

According to the latest data, commercial banks and cooperatives collectively have non-performing loans tied to owner-occupied housing (primary residences) worth €4bn on their books.

By Wednesday the Cabinet will have in its hands an ‘interim’ insolvency bill, sources told the Mail. It will cover some of the clauses governing the bankruptcy of legal and natural persons, with particular reference to primary residences.

“It’s a stepping stone that should allay DIKO’s concerns and is designed to get them on side with the foreclosures bill,” the same sources said.
A follow-up insolvency bill would be ready by year’s end, they added.

One of the provisions making it inside the stopgap insolvency bill will likely be that protecting homes worth up to €350,000, pending the financial ombudsman’s mediation.

The provision already features in a separate law passed previously, but DIKO wanted it spelled out again in a new insolvency law.

The foreclosures bill needs to be approved by the House before the next meeting of euro zone finance ministers, in September, for the country to receive the next tranche of international assistance.

Essentially the government is now bringing forward the extra safeguards to homeowners in a bid to placate opposition parties, who all warned they would vote down the bill unless it were amended.

But the administration – on the advice of its international lenders – has said there is no scope for tinkering with the legislation. That necessitated a tactical maneuver – producing legislation additional to the foreclosures item.

Asked whether the government has a plan B in mind in case the extra provisions fail to sway the parties, Anastasiades said he had every confidence in the parties “acting responsibly” as they have done for most of the bailout-related legislation thus far.

In theory, the foreclosures bill can pass with just DISY’s ayes should main opposition AKEL vote against it and the other parties abstain. But the government apparently does not want to take any chances, wanting to bring DIKO on board so as to ensure passage of the bill.

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