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Cyprus

DIKO open to allowing foreclosures law with a condition

By Angelos Anastasiou

DIKO leader Nicolas Papadopoulos on Friday left open the possibility of his party allowing implementation of tougher foreclosures legislation, provided the government commits to exempting primary residences until March 31.

Speaking after a joint session of the House finance and interior committees, Papadopoulos said that next Thursday’s plenum would decide whether to renew the suspension of foreclosures law or not.

Asked to comment on his party’s stance, Papadopoulos said that if preparation of the government bill on corporate insolvency is concluded by then, DIKO will “discuss” Anastasiades’ proposal to implement the foreclosure law while exempting primary residences.

The proposal was tabled at committee level last Thursday by ruling party DISY.

“Right now we have before us only DISY’s proposal – not the government’s,” he said.

“We hope that the government will state its commitment to the bill, taking responsibility for suspending the foreclosure law on homes. You understand, this will need to be stated by a government representative when the bill will be discussed by the committee.”

A blanket suspension on new, tougher foreclosure legislation was voted by opposition parties in mid-December 2014, and renewed in January until March 2 thus derailing Cyprus’ economic adjustment programme and prompting the Troika to freeze the next tranche of the €10-billion emergency bailout loan extended to Cyprus by international lenders (European Union, European Central Bank, and International Monetary Fund).

The suspension – and subsequent derailment of the programme – caused heated political debate in Cyprus, with the government accusing the opposition of irresponsible populism and parties pointing out its failure to prepare a set of bills governing insolvency and bankruptcy – which became known as the “insolvency framework”. The fifth and final bill of the framework in the final stages of preparation following intense consultations with the Troika, and is expected to be forwarded to the House on March 5.

Addressing the joint committee session on Friday, finance ministry official Andreas Charalambous said the fifth insolvency bill – which includes the treatment of guarantors after a borrower has declared bankruptcy – will be forwarded to the cabinet on March 3.

Asked to comment on the thorny issue of guarantor protection, Charalambous said the finance ministry was in consultations with the Troika regarding the reasonable objections raised.

“The issue remains under review until solutions can be found, and there is an ongoing consultation with both the Troika and party experts,” he said.

On the same issue, Papadopoulos said that some suggestions have been made to the Troika with regard to the protection of guarantors, and responses are expected in the coming days.

He expressed the hope for a positive reaction by the Troika, because the issue of guarantors is “a complex but important issue, which must be viewed in the broader context of the collapse of the Cypriot economy”.

Meanwhile, the finance committee resumed discussion of the four insolvency bills tabled, with the Finance ministry pledging to comment on each point raised by next Thursday.


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