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15 June, 2024
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Cyprus parliament suspends foreclosures

Finance Minister: Today's parliamentary decisions undermine public interest

The House of Representatives voted in its last plenary before summer recess a number of amendments to the foreclosure law that foresee a freeze in foreclosures and suspension of loans eligible to join the ESTIA loan relief plan.

Finance Minister Haris Georgiades said that ''today's parliamentary decisions are likely to satisfy for a short time a segment of public opinion but undermine public interest. I will reccomend to the President of the Republic that the decisions be referred back. In the hope that the House, calmly and responsibly, will reconsider its decisions".
The amendments were proposed by EDEK and were supported by DIKO, Greens, Citizens Alliance and Solidarity Movement. At the beginning of the discussion the House Speaker Dimitris Syllouris tabled a proposal to postpone the vote but the proposal was rejected.

Georgiades: I will recommend to the President of the Republic that the decisions be referred back

Speaking to Kathimerini Finance Minister Haris Georgiades said that the issue concerns both substance and procedure. He said that it has not yet been understood that Cyprus is an EU Member State and thus a member of the banking union. "Cyprus can not be the only member state to have its own laws on such issues," he added. He concluded that "foreclosures are not the first solution to be used, and they are not, but the legislative framework must exist, as is the case in each Member State. If we want to have our own rules, we will have consequences. The issue will go back to the House if the President follows my recommendation and I hope there will be a clearer approach on the issue".

The Minister added that Cyprus is one step before the implementation of the ESTIA plan, a scheme designed to provide targeted coverage to those who need it. "Do not forget that ESTIA will distinguish between strategic non-payers and those who really need it," he underlined.

In response to rumors that the European Central Bank wants to respond formally to the implications of the law, the Minister noted that "as a member of the European Union it is a duty of Cyprus that any law relating to banking be submitted to the ECB for advice, this has not yet been requested by us ".

The Cyprus Central Bank and the government have warned that the credibility of Cyprus to fulfil its reform obligations will lead to a downgrade of the Cypriot economy and impede foreign direct investments.

Financial analysts see the issue of decelerating the process of dealing with non-performing loans as a major mistake arguing that international firms that purchase and consequently deal with non-performing portfolio recovery will no longer trust the Cypriot system to provide a level playing field.


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