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Cyprus

Foreclosures bill passes by 47 votes (Updated)

By Constantinos Psillides

THE hotly-debated foreclosures bill was passed by the House of Representatives on Saturday, following yet another marathon extraordinary session, but putting an end to three weeks of bickering and intense deliberations between parliamentary parties and the government.

Along with the controversial bill, the parliament passed a number of amendments and additional bills, said to aim for the protection of borrowers against foreclosure.

The bill was passed by 47 votes – those of AKEL, DISY and DIKO.

EDEK, the Green Party and independent Zacharias Koulias – a total of seven – voted against it. EVROKO’s leader Demetris Syllouris abstained.

The plenum session was originally due to start at 9.30am but was then pushed 10.30am, 11.30am and then to 12.30pm. It finally started at 2pm.

Voting on the bills came close to being postponed until Monday, when at around 4pm, Citizens’ Alliance MP Nicos Koutsou decided that the prolonged session was making a mockery of the deputies and should be put off until then.

“We will be ridiculed if we postpone voting for Monday,” responded AKEL MP Nicos Katsourides, asking that Koutsou’s proposal be rejected. Voting finally commenced at 4.30pm.

Following a suggestion by the majority, the plenum approved a resolution making the implementation of the foreclosure bill conditional on implementation of the insolvency framework.

The resolution requires the government to bring before the plenum legislation regarding insolvency no later than January 1, 2015, when the foreclosures bill will be put in effect.

The insolvency framework, a set of bills complementary to the foreclosures legislation, will be designed to balance borrowers’ rights with their obligations to lenders, offering them protection from foreclosure under certain circumstances.

According to Cyprus’ economic adjustment programme, it is scheduled to be put to a vote by the House by the end of 2014.

Greens’ MP Giorgos Perdikis didn’t vote for the resolution, saying the insolvency legal framework was flawed, vague and that it would end up being used against the very people it claims to protect.

Passing the additional bills, along with the troika required foreclosures bill, is regarded as a face-saving manoeuvre for the MPs. The troika had already rejected these suggestions when put before them by the House, thus President Nicos Anastasiades will most likely send all the bills back to the House, with the exception of the foreclosures bill which was set as requirement by troika for Cyprus to receive the next bailout tranche. The bill was to be passed before next week’s Eurogroup meeting.

With that criterion fulfilled, Anastasiades is free to send the rest of the bills and amendments back to the House.

Then, the House majority refuses to budge, and the President refers the matter to the Supreme Court, meaning the parties’ bill has no effect until the court issues a ruling.

AKEL general-secretary Andros Kyprianou, in his speech before the House, inadvertently admitted to the face-saving stratagem, warning Anastasiades that his party would find other ways “to protect the people.”

“If president Anastasiades sends back these amendments, he will be siding with troika and put himself against the wishes of the people’s representatives,” said Kyprianou.

Linking the foreclosures bill with the insolvency framework – along with the additional bills and amendments provided DIKO and AKEL with enough political cover to side with DISY and secure the needed majority in the plenum for the foreclosures bill to pass.

DIKO, which was in the government coalition a year ago, has voted for almost every troika-related bill so far, including the equally hotly debated privatisation bill.

 

Nicolas Papadopoulos, the leader of DIKO, told the plenum that mass foreclosures were an unavoidable outcome, unless a way is found to stop it.

“We have to stop foreclosures. We have to protect people’s homes. But if we allow Cypriot businesses to fail, there will be no homes left to protect. By protecting homes and destroying businesses we achieve nothing,” he said.

The second bill to be passed eliminates abusive charges by banks and includes a ban on excessive loan restructuring fees and a cap on late-payment interest at 2 per cent.

A third bill regulates the sale of loan portfolios, which will be allowed only to legal persons licensed by the CBC and credit institutions or funds licensed to operate on the island.

The fourth bill expands borrowers’ right of legal assistance in court proceedings relating to foreclosures.

The fifth, and final, bill obliges the Central Bank of Cyprus to inform the House of developments in loan restructuring on a quarterly basis.

DISY leader Averof Neophytou – who acted as an intermediary during the parties’ negotiations with the government – blamed the Eurogroup and the previous administration in equal measure for the state of the economy.

“Cypriot MPs are forced to vote on the lesser evil,” said Neophytou, stressing that the foreclosures bill was a tool for the banks to go after the big borrowers and not the those who cannot make their payments due to the country’s financial state and the austerity measures.

“If the banks think they can cannibalise the public, then I will be on the side of all those that oppose them,” warned Neophytou.

Regarding the insolvency bill, Neophytou said that the government would keep its promise.

The next House session has been set for September 18.

 

 

 



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