Cyprus Mail
Cyprus

President will veto House amendment on foreclosures

By Angelos Anastasiou

PRESIDENT Nicos Anastasiades will veto the amendment voted by the House pushing implementation of tougher foreclosures legislation back by one month, to January 30, it was announced yesterday.

According to sources cited by the Cyprus News Agency, the deadline for the President to veto or sign the amendment into law expires Tuesday. Thus, Legal Services will prepare the letter to the House President setting out the rationale for the veto, at which point the House is constitutionally afforded 15 days to convene and decide on further handling of the matter.

But while the House may opt to insist on passing its amendment, it is understood that the two-week window available to the President to decide his next move will render the point moot as the January 30 milestone will have been passed.

Besides stirring a political crisis domestically, the amendment tripped up the country’s economic adjustment programme, a reform agenda agreed with international creditors (European Union and International Monetary Fund) in mid-2013 in exchange for a €10-billion emergency loan following a dramatic banking meltdown.

The programme veered off track in mid-December, after opposition parties passed an amendment that effectively – albeit temporarily – neutralised the radical overhaul of foreclosures legislation, which was originally slated to come into effect on January 1st, 2015, pushing its implementation back by one month.

Opposition parties cited the government’s failure to deliver on its promise of preparing and forwarding to the House five bills comprising the “insolvency framework,” a set of laws designed to clarify the handling of instances of defaulting borrowers that is perceived as a counterweight – or “protective net” – to tougher foreclosures regulations, in time for its simultaneous implementation with the foreclosures rules.

But Cyprus’ international creditors did not cast a sympathetic eye, and days after the amendment was voted, the IMF announced indefinitely postponing its progress review of the Cypriot programme – on which the release of the next tranche of the loan, some €86 million, hinged.

It is understood that progress reviews will resume once barriers to implementation of the foreclosures bill are lifted.

Anastasiades’ intention to veto the amendment had been no secret, but emergency surgery to repair his heart valve in the United States had kept him out of commission for most of last month.

Meanwhile, Finance Minister Harris Georgiades announced that the five bills comprising the insolvency framework are almost done – in fact, three have already been submitted to the House, and another will be submitted as soon as the House returns from its Christmas recess. The final one, while ready, is currently awaiting the Troika’s final comments before being forwarded to the House.

“All five bills of the framework will be available to the House sometime within this month,” Georgiades said.
With regard to the veto, the minister said that while no legal or constitutional issues arise from the amendment, it does hurt the government’s effort to build up the country’s credibility.

“[This amendment] creates serious issues with regard to the need to maintain credibility that can restore the confidence we want to create for our economy,” he told state radio. “Consequently, yes, the President will veto the amendment back to the House, and we will argue our case before the House again – that there is another way to achieve our mutual goal of simultaneous implementation of foreclosures legislation and the insolvency framework.”

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