Cyprus rul­ing opens way for bailout funds

Kathimerini English - - Focus -

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.

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