Cyprus Mail
Cyprus

Opposition stands firm over repossessions

By Elias Hazou

DESPITE presidential calls on them to water their wine, the opposition parties stuck to their guns on Monday, insisting that legislation governing repossessions must remain frozen until the enactment of an insolvency framework protecting vulnerable home owners.

Following a meeting at the presidential palace, it was agreed only that the finance minister would continue “an exchange of views” with the parliamentary parties on the issue.

The opposition argues that without a package of legislation protecting borrowers – known as the insolvency framework – mortgagors will be at the mercy of the banks.

The framework consists of five bills – which the government has been working on for months – and was supposed to be submitted to the House by the beginning of January.

Earlier this month, President Nicos Anastasiades vetoed a bill passed in the House by the opposition parties on December 18 suspending the enforcement of foreclosures legislation and pushing back the law’s coming into force until end of January.

In a letter addressed to the House on January 5, Anastasiades urged MPs to rethink their stance and accept his veto, warning that otherwise the credibility of Cyprus was at stake.

“Suspension of the law…would shatter the credibility of the Republic, which would cause a chain reaction of problems in relation both to our current lenders as well as any new lenders,” the president wrote.

Similar appeals for restraint were made by Finance Minister Harris Georgiades, who also attended Monday’s meeting with the party leaders.

Georgiades assured the parties that the fifth and last item comprising the insolvency framework – a bill governing personal bankruptcy and primary homes – was completed and was in the process of being reviewed by the troika of international lenders.

However he could not fix a date on when the last bill would be forwarded to parliament.

Georgiades is said to have told the party leaders an effort should be made to avoid giving the impression abroad that the Cyprus economy is unstable and thus drawing comparisons with Greece.

On Tuesday the House finance committee will discuss the president’s veto and decide whether to accept it or not. Should they decide against, the House will vote anew on the bill suspending the foreclosures law, with reports suggesting that this could happen on Thursday during the parliament’s first plenary of 2015.

Georgiades will attend Tuesday’s session of the finance committee in a last-ditch bid to persuade opposition parties to back off.

And on Wednesday Georgiades will reportedly meet with a panel of experts appointed by the parties as well as with members of the finance committee to discuss and review the insolvency framework.

But judging from the party leaders’ remarks after Monday’s meeting, the opposition was unwavering. There was even a hint that they might extend the suspension of the foreclosures law beyond January.

AKEL leader Andros Kyprianou said that if they are dissatisfied with the bankruptcy bills, then foreclosures must be indefinitely postponed.

Ideally, Kyprianou said, the foreclosures legislation should have been suspended until end of June.
Similar comments were made by DIKO, EDEK and the Greens.

The controversy over foreclosures – which some see as artificial as the accompanying regulations have yet to be put into force – has partially derailed the island’s adjustment programme.

In early December the European Stability Mechanism (ESM) disbursed a delayed €350m bailout tranche, but the International Monetary Fund withheld disbursal of another €85m which was part of the same instalment, citing the suspension of the foreclosures law.

The troika meanwhile will not conduct a full review mission of Cyprus’ adjustment programme until the situation is normalised.

 



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