Anas­tasi­ades calls party lead­ers for meet­ing

Financial Mirror (Cyprus) - - FRONT PAGE -

The cen­tre-right Demo­cratic Party (DIKO), that was widely ex­pected to sup­port a re­vised leg­is­la­tion on fore­clo­sures so that it could pass through par­lia­ment on Mon­day and avert an­other cri­sis, has de­cided to re­ject it, say­ing it is a “bad bill”.

The fore­clo­sures bill is a de­mand laid down by the Troika of in­ter­na­tional lenders so that banks could have a tool to force bor­row­ers to re­pay their loans and lower the bank’s non­per­form­ing loans port­fo­lio. In or­der to pres­sure the gov­ern­ment and all par­ties con­cerned to pass the bill, the Troika has made it con­di­tional to re­ceiv­ing the next tranche of bailout money, es­ti­mated at 453 mln eu­ros, or the gov­ern­ment could run out of money by the end of Novem­ber.

DIKO spokesper­son Chris­tiana Ero­tokri­tou said af­ter a lengthy and “very pro­duc­tive meet­ing” of the ex­ec­u­tive coun­cil in Nicosia late Tues­day that “the bill can­not be sup­ported as is.”

“We sub­mit­ted spe­cific sug­ges­tions to the Pres­i­dent and the Min­is­ter of Fi­nance, but un­for­tu­nately none were con­sid­ered. It is a bad bill that will cre­ate more prob­lems,” Ero­tokri­tou said, adding that the bill “changes wholly the bal­ance and NPLs move to the shoul­ders of bor­row­ers who have no pro­tec­tion.”

Ear­lier in the day, Pres­i­dent Ni­cos Anas­tasi­ades, who has called all party lead­ers to a meet­ing to dis­cuss the con­tro­ver­sial bill on Thurs­day, found sup­port from the Bor­row­ers As­so­ci­a­tion and the Pri­mary Home As­so­ci­a­tion, whom he re­as­sured that low-in­come and vul­ner­a­ble bor­row­ers would be pro­tected as the fore­clo­sures process would be ar­du­ous, trans­par­ent and always in the bor­rower’s in­ter­est.

Bor­row­ers As­so­ci­a­tion Pres­i­dent Costas Me­las, ap­pealed to the po­lit­i­cal par­ties to ap­prove the bill into law and as­sured that with the amended bill and the safety clauses it con­tains, no mass fore­clo­sures will take place.

Pri­mary Home As­so­ci­a­tion Chair­man Stavros Pa­padouris said the rights of bor­row­ers and own­ers of pri­mary homes are be­ing safe­guarded to a point with the bill.

He said that pos­i­tive moves on the part of po­lit­i­cal par­ties will help reach a con­sen­sus that will pro­tect the proper bor­row­ers and own­ers of pri­mary homes.

The fore­clo­sures bill needs to be ap­proved by the House of Rep­re­sen­ta­tives be­fore the next Eurogroup meet­ing in mid Septem­ber, with par­lia­ment ex­pected to con­vene on Mon­day in an ex­tra­or­di­nary ple­nary ses­sion to dis­cuss the bill.

Thurs­day’s meet­ing at the Pres­i­den­tial Palace is due to dis­cuss the bill on fore­clo­sures of mort­gage prop­er­ties prior to it be­ing tabled to the House.

On Mon­day, Anas­tasi­ades also met with the Chair­men and Chief Ex­ec­u­tive Of­fi­cers of the Cypriot banks and Co­op­er­a­tives, in the pres­ence of the Min­is­ters of In­te­rior and Fi­nance, whom he in­formed about the fore­clo­sures bill.

This fol­lowed a se­ries of meet­ings with stake­hold­ers and key mem­bers of his cabi­net through­out last week with the aim of seek­ing con­sen­sus among most of the po­lit­i­cal par­ties.

Al­though the gov­ern­ment has in­sisted on a num­ber of coun­ter­mea­sures to al­le­vi­ate a po­ten­tial im­pact on low­in­come home own­ers, the Troika is re­port­edly adamant and has not ac­cepted changes, such as a 50% dis­count on prop­erty trans­fer fees.

On the other hand, the leg­is­la­tion on in­sol­ven­cies has been brought for­ward in or­der to be bun­dled with the fore­clo­sures bill, sat­is­fy­ing a de­mand of the ma­jor­ity of op­po­si­tion par­ties.

Also, the gov­ern­ment seems to be ready to pro­ceed with up­grad­ing the role of the Hous­ing Fi­nance Cor­po­ra­tion from a fi­nancier to a port­fo­lio man­ager, whereby the state would step in to en­sure that fore­closed prop­er­ties do not fall in the hands of prop­erty sharks.

Al­though the gov­ern­ment reached a deal with the Troika, op­po­si­tion par­ties say the bill can­not be ap­proved as it is and want fur­ther changes or ad­di­tional leg­is­la­tion. In­ter­na­tional lenders have ruled out all changes pro­posed by po­lit­i­cal par­ties.

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