Cyprus Mail
Cyprus Featured

Government withdraws foreclosures bill after ‘damaging’ changes

The government said on Wednesday it withdrew a bill amending the courts law after opposition parties added provisions that change the foreclosures framework, jeopardising the stability of the banking sector.

In a joint statement, the ministries of finance and justice also warned that proposals aiming at thwarting the foreclosures framework put the banking sector on a dangerous path.

“The decision to withdraw the bill amending the courts law was taken after the discussion in the House legal affairs committee, in the absence of the ministries and the central bank, which concluded in a series of amendments by parties that are not only outside the philosophy of the government bull, but their potential approval would damage the foundations of the banking system and lead us to events (similar to those of) 2012-2013” when one bank was shuttered and deposits were seized to capitalise another.

The two ministries said the courts’ bill aimed to speed up the adjudication of cases between borrowers and banks or asset management firms, but ended up instead “an instrument that fully suspended foreclosure procedures, affecting banking stability and the Republic’s obligations towards European and international institutions”.

Opposition parties had warned that withdrawal of the courts bill would prompt them to table the proposals before plenum independently on Thursday.

The ministries said approval of the amendments would jeopardise banking and economic stability.

“Changes to the foreclosures framework on the basis of the party proposals would result in capital needs for the banks and put the Republic’s credit rating in danger,” the ministries said.

They reminded the opposition that ratings agencies, the ECB, and the IMF were clear on the dangers of the planned changes.

“One would expect that in a state that reached the brink of bankruptcy in 2013, with the memories of that period still fresh, its legislators would be careful in their moves,” the two ministries said.

 

Related Posts

Patients falling through the cracks

Gina Agapiou

Our View: Very little Cyprus can do legally to stop migrant influx

CM: Our View

Tales from the Coffeeshop: Most privileged among us play the victim card for the Pope

Patroclos

Paphos hotels say November wasn’t bad, not hopeful for December

Antigoni Pitta

Coronavirus: Two deaths, 428 people test positive on Saturday (Updated)

Staff Reporter

Coronavirus: Hundreds protest against Covid measures in Limassol

Antigoni Pitta