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25 October, 2020
 
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House approves state guarantees in co-op deal

Cyprus parliament passes legislation on foreclosures, bankruptcy, state guarantees for Hellenic

Newsroom

The House passed legislation Sunday night in favour of providing state guarantees to Hellenic Bank in its acquisition of Cyprus Cooperative Bank’s healthy portfolio.

The bill removes obstacles for the government to offer a financial cushion to organisations on the basis of protecting public interest, essentially approving state protection for Hellenic Bank over absorbing potentially high-risk loans from CCB.

Ruling party Disy were joined by opposition Diko and Edek parties in favour of the bill with 32 votes, 20 MPs voted against the government-sponsored legislation.

A number of other bills, including long-overdue foreclosure and bankruptcy laws, were also approved during the Sunday emergency session, while ;ast-minute amendments offered by the opposition did not get enough votes. 

The state's attorney general had warned parliament earlier not to try and pass amendments at the last minute, citing lack of legal scrutiny.

Hellenic Bank is set to acquire a healthy portfolio in the Cyprus Cooperative Bank (CCB), an institution which is burdened with NPL at 60% (nearly €7 billion), with the commercial bank absorbing co-op banking operations and assets except bad loans and toxic assets.

But Hellenic demanded state guarantees for absorbing potentially high-risk loans in the co-op takeover.

Disy chairman Averof Neophytou had warned earlier that if MPs failed to pass legislation on state guarantees on Sunday, ahead of summer vacation, the Hellenic-CCB deal could be in jeopardy.

Centrist Diko leader Nicholas Papadopoulos, whose party gave the necessary votes to the government bills, also stressed that votes were needed to avoid catastrophic consequences to the Cyprus economy.

Left opposition Akel has accused the government of using manipulative politics leading up to the Hellenic-CCB deal, saying Disy and government have placed special interests above the common good and public interest.

TAGS
Cyprus  |  bad loans  |  Hellenic  |  state guarantees  |  bankruptcy  |  foreclosure  |  NPL  |  House  |  parliament

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