By George Psyllides
Developments in the island’s economy have proven wrong those who claim everything was going fine, DIKO chairman Nicholas Papadopoulos said on Friday, accusing the government of refusing to see reality.
“What the average Cypriot finds out every day is that two years after the 2013 (deposit) haircut and that bad solution imposed on us at the time, we are unfortunately in a much worse position,” he told a news conference.
The DIKO chairman said non performing loans (NPL) were the biggest problem for Cyprus along with loan restructuring.
Pushing for restructuring of bad loans must be the primary aim of economic policy, he said.
Papadopoulos said even if the foreclosures law was enforced, it would not resolve the NPL problem.
“In this case, they will tell us that the only hope is the mass sale of loan packages to investment funds,” he said.
He said a new growth model must be drafted, the return of the money seized in the haircut, the attraction of new investment, a cut in interest rates, the protection of viable borrowers, and the restructuring of loans.
Papadopoulos proposed banning banks from taking deemed profits into account when it came to NPLs under restructuring, and implementing voluntary repayment of loans like Greece does, where agreed targets are set and if the borrower meets them the bank waives part of the loan.
He also proposed banning late fees from being charged retroactively, starting a rent-for-mortgage scheme, and draft a proper insolvency framework that would force banks to restructure loans.
His DISY counterpart said wavering only made things harder for Cyprus. Averof Neophytou said society had sacrificed a lot in the past two years and the country was in the final stretch of coming out of the programme.
“Wavering and wrong messages we are unwillingly sending abroad make things harder for our country,” he said. “Society wants calm and the economy wants confidence.”
The DISY leader said he understood the sensitivities of other parties and pledged to try and play a positive role in finding convergences that would keep the country on course.
There was no other choice, he said, as turmoil created additional problems.
“You cannot play with the economy to create impressions,” he said.