Ever since the 2013 bailout, political parties have been on a mission to help borrowers who have been treated as victims of the banks not to repay their loans. They dragged their feet over the foreclosures law, eventually forced to approve it because the troika was threatening to withhold a scheduled payment. The insolvency law took much longer than was necessary to be approved, then they came up with the protection of the primary residence and so on.

For the parties, the only concern was the ‘protection of borrowers’ not repaying their bank loans, as if it were a moral imperative to protect people who refused to honour their contractual obligations. They may have borrowed money which they were not paying back, but in the eyes of deputies, they were victims of the banks which, quite unreasonably, wanted the loans they gave repaid. This mission of the deputies continues to this day.

On Wednesday the House legal affairs committee discussed a bill that would give loan recovery companies the ability to use as evidence in court the documentation of a bank loan. Whereas a bank could use this documentation in a court, a loan recovery company that had bought a bank’s loan portfolio could not so without first persuading the judge of its admissibility. The admissibility of the bank documentation was dependent on the identity of the plaintiff, for some bizarre reason.

We have encouraged loan recovery companies to set up operations in Cyprus so they could relieve banks of their non-performing exposures and improve their balance sheets, but our laws are preventing these companies from doing their job. Recently, deputies were trying to prevent these companies from having access to information at the Lands and Surveys Department about borrowers. It was another attempt to ‘protect’ loan defaulters by preventing the companies gaining information about the borrower’s real estate assets.

This charade about protecting debt defaulters needs to stop. It is mockery of the notion of rule of law when loan recovery companies have to negotiate a long course of obstacles, put in place by lawmakers, in order to recover what is owed. Loan contracts are rendered almost worthless when laws have provisions protecting those that do not honour them. This is bad for a country like Cyprus that has grand ambitions of becoming an international business centre. Our lawmakers need to abandon this hideous populism of protecting people that disregard the law if the country wants to be taken seriously as a base for international business.