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Our View: We can only hope sanity prevails over foreclosures

Foreclosures

The House of Representatives will suspend its summer recess on Tuesday to discuss the president’s return of the law extending the suspension of the foreclosures law until October 31. First the House finance committee will meet to examine the reasons given to justify the president’s decision and prepare a report for the plenum to discuss subsequently.

It is doubtful there will be much rational discussion at the plenum as the matter has become a clash between the president and the opposition parties, engaging in their customary populism, as the alleged defenders of house owners against the inhumanity and greed of the banks. This is the simplistic way the matter has always been presented by opposition parties, which seem incapable of seeing the negative consequences for the economy.

These were listed in an announcement issued by the president on Monday, but even if the parties disregard the danger in which they put the economy, they cannot so flagrantly violate the constitution. How can lawmakers show such ignorance of the constitution, which safeguards the freedom to enter a contract (Article 26); the law passed interferes in a contractual agreement between a bank and a borrower. It also clashes with article 30 guaranteeing access of contracting parties to justice.

These violations of the constitution have been in force since December 2020, on the pretext of the pandemic, but the president had not objected to the law until now, which explains why the parties keep extending it. The freezing of foreclosures on houses and business premises up to a certain value was originally supposed to be in force until the end of March, was extended to the end of July and, most recently, to the end of October.

It should never have been allowed to pass by the president in the first place. Now President Anastasiades is complaining, quite rightly, that the suspension of the law could not be deemed temporary. The continued votes by the House for the extension of the suspension of the law could lead to this being interpreted as a permanent suspension by borrowers and by the supervisory authority, said the president’s announcement.

And it would not be a mistaken interpretation by supervisory authorities, given the way the opposition parties have made it their mission to protect people, many of them strategic defaulters refusing to repay their bank loans. The pandemic has become a very convenient excuse, but there had been attempts to suspend the foreclosures law before the outbreak of Covid-19 because protecting people not repaying their bank loans is a populist cause.

We can only express the hope that sanity will prevail at the House plenum and the parties will defend the interests of the economy rather than the interests of strategic defaulters.

 

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