CYPRUS: President to send foreclosures bill back to parliament

President Nicos Anastasiades plans to send back to parliament a bill approved by the opposition last Thursday that calls for a suspension of the framework law on foreclosures, until the related bill on insolvencies is also tabled.

The vote had infuriated Finance Minister Haris Georghiades who chastised deputies for passing such a law that jeopardised the smooth progress of the economic adjustment programme.
Already, the IMF said it was suspending the next tranche of about EUR 86 mln in aid because of the new bill, just after Cyprus had already secured some 350 mln from the European Stability Mechanism.
The communist party AKEL had sought a suspension until June, while AKEL, Centre right DIKO, the Citizens’ Alliance and the Greens compromised with the socialist EDEK proposal for a suspension until the end of January 2015.
Non-passage of the framework bill delays efforts by commercial banks to enforce foreclosures on deliberate non-performing loans, currently representing more than 50% of their loan books, a requirement by the Troika of international lenders for banks to reduce their high-risk exposure.
President Anastasiades told reporters after his first Cabinet meeting on Tuesday that he plans to send back the law to parliament because “it contributes nothing to those we would like to protect given that without the by-laws, the foreclosure law cannot be implemented”.
He said that “the suspension of the law was unnecessary” and that “we appeared to meet the conditions set by the Troika and then we appeared to be inconsistent in respect to our commitments and obligations”.
The president’s move is likely to lead to a new round of lengthy deliberations between the executive and the legislature over the foreclosures law. The original law was voted in September but remains inactive, as the government has not drafted by-laws for its implementation.