Foreclosure legislation deemed unconstitutional

The amendments to the foreclosure legislation are unconstitutional said President Anastasiades in a letter to Parliament, stating that articles 23, 25, 26, 28 and 30 of the constitution are violated.

Finance Minister Haris Georgiades said on Tuesday that "a legislative framework must be effective, it must not change frequently, in order to create a trustworthy framework that will enable us to manage this last remaining problem of non-performing loans.''

"We believe that the interventions of the Parliament will neutralize the effectiveness of the legislative framework, will create more problems than it solves, there will be a burden for the borrowers, for the people, and will not provide a final solution. I will also destabilize the banking system and hence have a negative impact on the economy," said Georgiades.

The President of the Fiscal Council Demetris Georgiades referred to the continuing uncertainty in the financial system, due to the fact that the mechanism for resolving the NPE problem has not been finalised. ''This uncertainty and the prolongation of the problem worsens the damage to the whole economy," he said.

He also noted that the delay in resolving NPEs has made it more difficult for borrowers, as the value of their collateralised property may have changed, while the loan balance has risen due to interest rates.