Cyprus Mail

AKEL moves to suspend foreclosures law

One of the bills relate to suspension of loan repayments, including mortgages, for nine months

By George Psyllides

MAIN opposition AKEL has tabled a proposal to suspend the law on foreclosures until the end of June 2015 as other parties were looking into ways to react following the Supreme Court’s rejection of related legislation they had passed in August.

AKEL said the suspension would give authorities time to prepare the so-called insolvency framework, which will include provisions to protect vulnerable groups from losing their homes.

“Six months is enough time to conclude procedures regarding the safety network and the rest of the issues,” MP Aristos Damianos said.

A similar bill, linking the implementation of the main foreclosures bill with that of the insolvency framework, was thrown out by the Supreme Court as being unconstitutional.

Three other bills had the same fate. In its decision published on last Friday, the court said the four bills were unconstitutional and also violated the separation of powers.

The bills that will make up the insolvency network are being discussed right now with AKEL opting not to participate, unlike all other parties.

DIKO said it was studying the Supreme Court decision but chairman Nicolas Papadopoulos, who became the government’s most vocal critic after his party’s exit from the coalition, signalled that they supported AKEL’s move.

“As DIKO we do not believe the law on foreclosures should be implemented without a safety net that will protect borrowers from the banks’ arbitrariness,” he said.

Approval of the rejected bills by parliament in August prompted international lenders to withhold the island’s next tranche of assistance because the bailout terms had been violated.

On Sunday, Finance Minister Harris Georgiades said the prospects were in place to lift the deadlock.

The matter will be discussed this week by the Eurogroup, which will be briefed by the minister about the court decision. “The outstanding issues have been overcome and the programme can continue,” he said.

But he also struck a note of caution regarding the need for co-operation on the domestic front, and acting responsibly.

A high-ranking eurozone official in Brussels said yesterday they were not yet aware of what the Cyprus government`s next step would be. “We have no information, we do not know what the government will do, but this can be a step forward in the right direction,” the official said. “We shall see what the Cypriot minister will say in the Eurogroup meeting on Thursday, and if all goes well, then the preconditions to disburse the next instalment might be fulfilled”.

The official described as “exemplary” the Eurogroup`s cooperation with the Cypriot authorities and assured that the adjustment programme would have positive results and would lessen the reasons for the financial crisis.

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