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Cyprus

EC says new foreclosure bills ‘incompatible’ with bailout terms

DIKO boss Nicolas Papadopoulos says only the banks will gain from the foreclosures bill (Photo: Christos Theodorides)

By Angelos Anastasiou

THE European Commission yesterday said that foreclosures-related legislation approved by parliament on Saturday were incompatible with the terms of the island’s bailout, as a fresh storm is about to blow after the President passed the buck onto the courts to decide on their fate.

President Nicos Anastasiades’ decision to refer four bills limiting the scope of the foreclosures framework to the Supreme Court to rule on their constitutionality prompted the ire of the opposition parties that voted them.

“While a detailed assessment is still ongoing, it appears clear that parts of the legislation voted through last Saturday, together with the foreclosures bill, are not compatible with the requirements of the MoU in this important policy area,” said European Commission spokesman Simon O’Connor

“We remain in close contact with the Cypriot authorities on this matter and are looking forward to hearing from them how they plan to proceed.”

Speaking at the CIPA international investment awards last night, Anastasiades called on everyone involved to realise the need to maintain unity and solidarity in satisfying the requirements of the troika’s programme.

“I do hope that we will be able to overcome the current critical juncture we have reached, not only through the efforts that the government is undertaking towards this cause, but, and most importantly, through appreciating that the only way for our country’s exit from the troika programme to take place sooner is via our compliance and implementation of the relevant provisions of the programme,” the president said, repeating what his erstwhile partner Nicolas Papadopoulos had said at some point before deciding to abandon the government coalition.

Earlier, Anastasiades decided to let the Supreme Court settle the matter, prompting a fresh volley of criticism from opposition parties.

Dissenters claim that, instead of heeding the Troika’s demands without challenge, the government should have exploited the House’s decisions as an expression of popular will and assume a more assertive negotiating stance.

Although sources cited by the Cyprus News Agency claimed the President was in contact with political leaders in order to avoid a heated conflict domestically, one after another parties criticised the government’s handling of the issue.

“It has now been confirmed beyond any doubt that the President chooses to join the Troika and its unpopular austerity policies,” communist AKEL leader Andros Kyprianou said. “He chooses to stand against the Cyprus people’s interests and the political majority.”

Former junior coalition partners DIKO accused Anastasiades of trying to buy time, serving only the interests of the banks.

“It is our belief that the bills and proposals put forth by DIKO are compliant with the Constitution,” party spokeswoman Christiana Erotokritou said. “However, the uncertainty (the president) caused by referring the laws effectively places the disbursement of the next tranche of financial aid in limbo, since for the duration of the referral the Troika will not consent to its release.”

“The only ones who stand to gain from this development are the banks,” party leader Nicolas Papadopoulos told state TV. “The foreclosures bill has been signed into law, the safety net for citizens will not exist, and we won’t receive the tranche. Who stands to gain from these political games?”

Despite the government’s pledge on Tuesday to refrain from engaging in political quarrels, it was prompt to lash back at the accusations later yesterday.

“The government will not follow AKEL’s failed tactics, which have led to the economic predicament we are currently experiencing,” deputy government spokesman Victoras Papadopoulos said in a statement. “With regard to AKEL’s claims that the President opted to join the Troika and its unpopular policies, the reality, painful as it is for AKEL, is this: it was AKEL’s government that resorted to the Troika for assistance following its disastrous policies, and certainly not the Anastasiades government, which took over a failing state on the verge of chaotic bankruptcy.”

Papadopoulos argued that the foreclosures bill provides adequate protection to primary home-owners, as it exempts primary residences from its scope until January 1, 2015, at which point the new insolvency framework will be tabled, which will offer alternative safeguards and protection.

DIKO also found itself in the government’s crosshairs, with Victoras Papadopoulos countering the party’s accusations and criticism and attacking its leader on a personal basis.

“The safety net for vulnerable groups is part of the bills voted by the House and signed into law by the President, as well as the bills scheduled to be voted soon as part of the insolvency framework,” he said in a statement. “Anything else argued by DIKO can only be interpreted as cheap populism.”

The deputy government spokesman invoked an incident from last April, when ruling DISY’s leader Averof Neophytou and DIKO’s leader Nicolas Papadopoulos had reached a backroom deal to kill a joint proposal tabled by AKEL and socialist EDEK, offering temporary court-ordered protection to primary home-owners and small businesses from foreclosure – which DIKO supported in last Saturday’s vote.

“Mr Nicolas Papadopoulos will have to explain why he reversed his position since April and ended up voting for an unconstitutional bill,” the deputy spokesman said. “When was Mr Nicolas Papadopoulos telling the truth to the people of Cyprus? When he argued that the fastest way out of the adjustment programme is through its implementation or now? What petty-political and petty-partisan reasons caused him to reverse his position in such a short period?”

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