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The Council of Ministers has approved a pair of long-outstanding bills that will now head to parliament for debate and a vote, thus concluding the thorny issue of the foreclosures package that has held up the fifth review by the Troika of international lenders and the next tranche of bailout money.
Government spokesman Nicos Christodoulides said on Friday that the first of two pieces of legislation refers to insolvencies and the framework for guarantors, and the other regulates the auctions and transfers in the case of foreclosures.
“We hope that the two (bills) will secure the necessary majority in parliament,” he said, referring to the reservations that centre-right DIKO had expressed for the bills to ensure protection of primary homes in order for its eight MPs to vote for the bill. The ruling Democratic Rally (DISY) has 20 votes in the 56-seat parliament and the single-seat European Party (Evroko) is expected to support the motion.
Christodoulides added that the bill on insolvencies is fair to the thousands of home-owners affected, adding that “this was the government’s strategy from the outset”.
Asked if the final bills enjoy the approval of the Troika officials, he said that “for some time now we have been engaged in talks both with the parliamentary parties and the institutions (Troika), so that we can conclude on a result that will help resolve the problem and at the same time secure all those who are in a needy state.”
Three leading bankers, the chairman of the nationalised and recapitalised Cooperative Central Bank, and the chief executives of Bank of Cyprus and Hellenic Bank have frequently reiterated their positions that the banks will not pursue to grab properties and become realtor companies. Quite the contrary, they insist that the foreclosures package of bills will help them recover securities from large borrowers who have available funds but refuse to cut down their non-performing loans, with NPLs now accounting for more than 50% of the island’s total loanbook.
The first of two bills approved by the Cabinet on Friday relates to the insolvency of natural persons and regulates the restructuring of loans to ensure a smooth repayment programme and secure the primary home from foreclosure, while up to 15,000 euros of debts may be written off where the borrower can prove insufficient income or funds to repay the loans.
The second bill regulates the transfer and mortgage of properties and determines the procedures for public auctions.
