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Cyprus

Georgiades warns parties not to disrupt foreclosures train

By George Psyllides

FINANCE Minister Harris Georgiades warned parties yesterday to avoid disrupting the island’s bailout programme by passing legislation that was incompatible with the terms.

The Eurogroup has already agreed to release the next tranche of aid but only after the Supreme Court threw out four bills that opposition parties passed to limit the scope of the foreclosures law.
Though being careful not to present it as a warning, Georgiades said releasing the tranche was a formality as long as conditions did not change in the meantime.

If something happened in the meantime “this formality will gain substantive importance,” he said.

Two parties, AKEL and EDEK, have submitted bills, the first to suspend implementation of the foreclosures law until July next year, the second to suspend it until the beginning of the year.

In a late meeting of its executive office, DIKO decided to side with EDEK and support their bill. “Our goal is to protect the people from foreclosures until an insolvency bill is brought before the House, which we hope will act a safety net for households and small businesses,” read a statement released by DIKO.

Georgiades said the facts were there: The Eurogroup had taken a political decision to release the money because it saw that Cyprus programme was advancing and that it was already yielding results. It also saw that the island met the conditions necessary for the release of the tranche, which was to pass effective foreclosures legislation.

“These are the facts,” Georgiades said. “The next big tranche is on its way, about €435 million, which our economy needs, and I am certain that all of us will co-operate with seriously and responsibly to secure the continuation of financing and the correction of the economy.”

The two parties said they want to pass the suspension because borrowers were left without a safety net.

And while parties had been emphasizing the need to protect primary residences and small businesses, EDEK’s intention was not clear, despite its pronunciations.

Repossessions of primary residences will not be enforced before the beginning of 2015 when the so-called insolvency framework comes into force.

But EDEK insists that the foreclosures law must be suspended now.

Parties are working with the government o draft the framework, the effort being to protect people who were unable to service their loans because of the downturn and not those who deliberately failed to do so.

The framework is made up of six hefty bills that regulate bankruptcies, administration, examinership, and the insolvency counsellor profession.

Daily Politis reported that the framework is currently missing one of the most essential elements, the amount of the loan that will specify which borrowers will be able to seek a binding arrangement with the bank through the insolvency councillor.



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