Cyprus Mail
FeaturedOpinionOur View

Our View: The Estia scheme needs to be axed

File photo

The Estia debt relief scheme, in the end, did not turn out the success it had been hoped. The finance ministry announced that only 802 applications of the 6,393 submitted, were approved; some 2,000 were not completed. It also said that 62 per cent, of the 4,374 completed applications, were rejected (2,711), while 17 per cent (743) were considered unviable.

Inevitably the government came under criticism from a borrowers’ group (Syprodat) and Akel, of course for not doing enough to help stricken borrowers. The government was “solely responsible” claimed Akel because the scheme was badly designed, as a result of which thousands of low-income borrowers were not approved; many did not complete the application because it was a costly exercise.

Syprodat was on the same wavelength, attributing the failure of the scheme “to the negligence and indifference of the finance ministry, but also the narrow-mindedness of those dealing with the matter.” The government had ignored calls to simplify the application process and the documentation required, said the organisation. It now expected applications to be re-evaluated so that more borrowers would become eligible.

What are these champions of people that refuse to repay their housing loans, suggesting? That the defaulters give their name and telephone number and be eligible to having 30 per cent of their loan repayment covered by the taxpayer? As if it is not bad enough that tens of millions of the taxpayer’s funds will be used to help debt defaulters, many of whom are taking advantage of the populism about the protection of the primary residence, Syprodat wants the government to pay without asking questions or setting criteria.

If the figures provided by the ministry show something, it is that more than half the applications did not satisfy the criteria. Some applicants may have had an annual income higher than the maximum set, some of the primary residences may have been valued above €350,000, other applicants may have had assets that made them ineligible and so forth.

The ministry was absolutely right in rejecting applicants that did not satisfy all the criteria, as many of them could have been strategic defaulters, who were perfectly capable of repaying their housing loans but were taking advantage of all the populist nonsense about protecting the primary residence. As our parties passed laws preventing banks from repossessing a primary residence, they encouraged people not to repay their loans.

And now, the populists are protesting because the government is not turning a blind eye to the fact that the strategic defaulters do not satisfy the criteria for the Estia scheme. Enough is enough. The ministry should now close the scheme and let the banks deal with the debt defaulters. There is no moral or economic justification for the taxpayer to subsidise, or for the law to protect people that cannot afford to pay for the house they live in.

Related Posts

Efforts to promote Cyprus to US tourists bearing fruit: Perdios

Jonathan Shkurko

Seven deaths put down to Covid in last week

Antigoni Pitta

Our View: Only the most privileged will gain from CoLA restoration

CM: Our View

Accusations fly amid Phedonas’ remarks

Elias Hazou

Cabinet approves bill opening way for zero-emissions zones

Elias Hazou

‘We do not negotiate workers’ rights’, union leaders say, thousands on strike (Update 3)

Nikolaos Prakas