FINANCE minister Harris Georgiades, who is on his way out, will be a big loss to the government when he finally goes. Despite the barrage of criticism directed at him by the opposition parties over the way he handled the co-op bank, and the loud calls for his resignation, his standing as a reliable and credible finance minister remains intact. Any sensible person would much rather have Georgiades in charge of the economy than any of the opposition party leaders that trade in naïve economics aimed to please the electorate.
To his credit, Georgiades was not afraid to speak out against the ‘sloppy and rushed’ bill on foreclosures approved by the legislature last Friday. “The proposal (bill) was drawn up on Thursday and voted on the very next day; this is not the way to go about legislative business,” the minister told CyBC radio on Monday. The parties that passed this bill completely ignored the way things work in the Eurosystem, even though it was made clear to them by both the central bank governor and the ECB. The bill gave the financial ombudsman the power to decide whether a bank had violated the rules of the central bank in negotiating the loan restructuring of a bad debt.
They proceeded with this provision, while ignoring the fact that the opinion of the ECB is necessary prior to legislation that could affect banking stability. And only a fool would think that a law designed to delay foreclosures procedures would not affect banking stability. Yet the irresponsibility of deputies and their utter disregard for our European obligations triumphed once again. They did not wait for the ECB opinion and they ignored the advice of the central bank governor and finance minister because they were hell-bent on passing a supposedly crowd-pleasing measure regardless of its consequences.
Even the main justification for the bill – protecting vulnerable homeowners – was exposed as myth. As Georgiades pointed out, the bill had no stipulation of income and asset criteria for anyone wanting to take their case to the financial ombudsman. This meant that even a millionaire strategic defaulter could go to the ombudsman to delay a foreclosure procedure. Yet the parties, misleadingly, claimed the bill would protect the primary residences of the poor and unemployed.
Georgiades has always acted as a bulwark against the economic lunacy promoted by the political parties and we should be grateful to him because he has also ensured the president is not influenced by them.