Cyprus ruling opens way for bailout funds
NICOSIA (AFP) – The Supreme Court of Cyprus yesterday ruled as unconstitutional four bills on bank foreclosures whose passage by Parliament prompted international lenders to halt payments on the country’s 10-billion-euro bailout. The decision should open the way for Nicosia to receive the next tranche of 436 million euros, which was blocked last month. European Union finance ministers objected to the bills, adopted to soften the impact of a new law governing foreclosures on loans required as part of the adjustment program linked to the bailout. The objective of the new law is to streamline bank foreclosures of bad debts as demanded by the troika of lenders, the European Commission, European Central Bank and International Monetary Fund. The law ensures foreclosures cannot be indefinitely delayed, reducing the process from years to months, establishing procedures for valuing properties and auctioning them. Among some of the objectives of the bills that were thrown out were efforts to dilute the law’s effect on low-income groups and to prevent widespread property repossessions. Last week, Fitch ratings agency said the banking environment remains challenging, given poor asset quality.