CYPRUS: New foreclosures law sent back to parliament… again!

President Nicos Anastasiades has sent back to parliament a bill approved by the opposition last month 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.
Government spokesman Nicos Christodoulides said that the President’s aim was to avoid yet another prospect of suspension of the programme with the Troika of international lenders.
Anastasiades discussed the delay with Interior and Finance Ministers Socratis Hasikos and Haris Georghiades who said that the final two bills of the six-pack measures on insolvencies would be tabled “within January.”
Already, the IMF suspended 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.
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.
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.