House ac­cepts one re­fer­ral on fore­clo­sures, re­jects another

Financial Mirror (Cyprus) - - FRONT PAGE -

The House of Rep­re­sen­ta­tives adopted one of the two re­fer­rals re­lat­ing to fore­clo­sures by Pres­i­dent Ni­cos Anas­tasi­ades but re­jected the other.

The im­ple­men­ta­tion of the bill on fore­clo­sures is a pre­con­di­tion for the dis­burse­ment of the sixth tranche of about 440 mln euros in fi­nan­cial as­sis­tance from the Troika of in­ter­na­tional lenders.

The Troika wants to in­tro­duce mea­sures that would make fore­clo­sures eas­ier in or­der to help banks re­cover non­per­form­ing loans and re­duce their as­set-based risk. The po­lit­i­cal par­ties, how­ever, em­barked on a pop­ulist cru­sade to de­fend the rights of bor­row­ers, at the time that the gov­ern­ment in­sists that th­ese rights are safe­guarded through a sep­a­rate bill on in­sol­ven­cies.

The re­fer­ral which was ac­cepted in Par­lia­ment on Tues­day by a majority of 28 in favour, 24 against and 4 ab­sten­tions, was on leg­is­la­tion ini­tially tabled by MPs stip­u­lat­ing that bor­row­ers have the right to sub­mit a com­plaint to the Cen­tral Bank of Cyprus on vi­o­la­tions by banks of the code of con­duct gov­ern­ing re­struc­tur­ing of loans.

The sec­ond re­fer­ral, which was re­jected unan­i­mously, con­cerned leg­is­la­tion which gives the Cen­tral Bank the power to in­ter­vene in cases of mass fore­clo­sure. The ple­nary then adopted by majority an amended pro­posal on the mat­ter.

Rul­ing party DISY Pres­i­dent Averof Ne­o­fy­tou had pro­posed to have con­sul­ta­tions with the Euro­pean Cen­tral Bank on the first re­fer­ral. He also spoke of the need to cre­ate con­di­tions for growth and at­tract in­vest­ments and crit­i­cised banks for send­ing out mul­ti­ple let­ters to bor­row­ers and guar­an­tors at a time when an ef­fort is un­der­way for par­lia­men­tary con­sen­sus on the mat­ter.

Pp­po­si­tion AKEL Sec­re­tary Gen­eral An­dros Kypri­anou crit­i­cised the gov­ern­ment and the Pres­i­dent for the way the whole af­fair was han­dled and said his party would ta­ble a leg­isla­tive pro­posal call­ing for sus­pen­sion of the leg­is­la­tion on fore­clo­sures.

He fur­ther ex­pressed his party’s readi­ness to dis­cuss di­rectly with Fi­nance Min­is­ter Har­ris Ge­or­giades the le­gal frame­work on in­sol­ven­cies which is be­ing drafted with the par­tic­i­pa­tion of ex­perts nom­i­nated by all par­lia­men­tary par­ties, ex­cept AKEL.

For­mer coali­tion part­ner DIKO MP An­ge­los Vot­sis said things would be dif­fer­ent if Par­lia­ment had be­fore it all the bills re­lat­ing to in­sol­ven­cies. The gov­ern­ment has pledged to draft the bills and sub­mit them be­fore the end of the year.

So­cial­ist EDEK MP Ni­cos Ni­co­laides said the leg­is­la­tion adopted by Par­lia­ment and re­ferred back to it by the Pres­i­dent aims to pro­tect cit­i­zens. He noted that in or­der for the cur­rent prob­lem to be re­solved, the Par­lia­ment must in­sist and con­tinue to seek al­ter­na­tive so­lu­tions.

Greens MP Gior­gos Perdikis said he will re­ject both re­fer­rals, adding that they lack con­sti­tu­tional and po­lit­i­cal rea­son­ing and aim to sat­isfy the whims of the Troika.

Cit­i­zens Al­liance MP Ni­cos Kout­sou said he will re­ject the re­fer­ral on the Cen­tral Bank be­cause it is not jus­ti­fied by way of con­sti­tu­tional vi­o­la­tion but rather by the ar­gu­ment that such a pro­vi­sion al­ready ex­ists in other leg­is­la­tion in force.

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