Defeated repo bill polarises parties

Political parties in Cyprus on Friday exchanged sharp words in response to Thursday’s controversial debate on foreclosures.

After a fiery debate in the House of Representatives on Thursday, the plenum voted down two bills which the government and banking authorities had warned could threaten the financial system as well as the country’s standing in international money markets.

The first defeated bill was Akel’s, which would have afforded borrowers the right to obtain a court order setting aside ongoing foreclosure proceedings against their property, on the grounds of unfair contract clauses and overcharging by banks.

The vote came to 27-27 and – with 54 MPs in attendance – it failed to pass.

“All 17 MPs of the Democratic Rally showed responsibility towards the country and the economy from irresponsible and dangerous proposals,” said Disy MP Onoufrios Koullas, referring to yesterday’s vote against a draft law on foreclosures in Parliament.

Speaking to Cybc, he said that the party agrees that a barrier to populism was erected and catastrophic consequences for Cyprus were averted.

Meanwhile, Depa in a statement said yesterday’s outcome creates a window of opportunity for the government and the entire political system to complete the borrower protection framework by the end of October 2023.

“Our decision and attitude yesterday was one of responsibility towards superficiality, dogmatism and harmful obsessions,” Depa said in a statement.

Depa added that its decision was made to avoid a repetition of events from 2013. “Our suggestion to expand the responsibilities of the financial commissioner, as well as our insistence on using it, was another point that prompted us to change our stance. Since a common understanding was reached with the coalition parties and the ministry of finance on the expanded role and responsibilities of the Commissioner (e.g. unfair terms, illegal charges, etc.), we had no reason to risk the country getting into adventures,” Depa continued.

In conclusion, Depa said it wants to send a clear message that this breather, until October 30, cannot be an excuse or an alibi for further delay or political games that will deviate from the government’s commitments.

Meanwhile, Akel called on the lawmakers who supported the bill to continue the effort to protect borrowers and put a brake on what banks and loan companies commit daily to the detriment of society.

Akel spokesperson, George Koukoumas said the masks fell during yesterday’s vote in parliament on foreclosures.

“The co-governing parties aligned themselves with Disy and the Christodoulides government and all together with the banks and vulture funds. The Disy and Diko fronts have now been joined by the Depa and the leader of Edek, which, with their filibusters and tricks, determined the result by preventing the adoption of the draft law, which constituted a minimum shield for the protection of borrowers against the aggressiveness of the banks,” Koukoumas said.

“Let those who voted against our proposal answer: In which well-governed democratic state are banks and loan buying/management companies left undisturbed to sell off properties for loans on which they arbitrarily and illegally imposed over-indebtedness and unfair terms? As for the government, let it answer: Is that what Mr Christodoulides heard from society? To be a servant to banks and funds, like his party and his predecessor?”

For his part, economist and former chairman of the Cyprus Securities and Exchange Commission (Cysec) Marios Clerides told Cyprus News Agency (CNA) that the discussion on suspending foreclosures would have been completely unnecessary if we had managed to correct the procedures of the courts for the quick administration of justice.

Clerides added that this “is the other point of view, which was not discussed at all”.

“If the state could fix the problems of justice, there would be no problem for borrowers, if they felt wronged by their bank, to go to court and in two months have the court decision,” he underlined, noting that “there is the possibility of abuse of borrowers’ rights” when, for example, you wait ten years for a court decision.

He also referred to the need for arbitration mechanisms for out-of-court decisions “as a way of faster administration of justice and often at a much lower cost”. This mechanism, as he explained, will generally concern the administration of justice in Cyprus and in particular small cases for which “a borrower does not dare to go to court due to high costs”, and not only problematic loans.

This would not be the mechanism specifically for problematic loans, but they could be included, he added.

He also said that if the courts worked properly neither the citizen would bear unfair delays nor could banks refuse if they acted illegally, he added. “If we had corrected the problems in the area of justice, we would not be discussing whether there is a violation of borrowers’ rights,” he added.