President agrees to foreclosure law extension

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President Nicos Anastasiades on Thursday signed the foreclosures law extension until January, despite the government’s previous insistence on defrosting it.

In an unexpected move, the President signed the law he had referred back to parliament two weeks earlier.

The law amendment, passed in November, sees the foreclosures freeze extended until the end of January 2023.

The foreclosures freeze law has been a thorny issue for the government, with state officials saying it would reward loan defaulters rather than protect vulnerable groups.

Finance Minister Constantinos Petrides and Anastasiades expressed their concern that the frequent renewal of the freeze will lead to the measure becoming permanent rather than a temporary fix during a time of hardship.

The latest decision is the fifth in a series of extensions imposed in August 2021 as borrowers came under pressure from COVID-19 lockdowns.

Anastasiades initially refused to sign the law and sent it back to parliament. But, as was expected, parliament rejected his motion to recall it.

If parliament rejects a referral, the President has two avenues: either sign it or send it to Supreme Court to assess its constitutionality.

In comments to CyBC, government spokesperson Marios Pelekanos said that since parliament did not accept his referral, Anastasiades had no choice but to sign it.

“Sending it to Supreme Court was not an option.

“This was the path he took six months ago, and the law was declared constitutional.”

Pelekanos was referring to a Supreme Court decision overruling the objections raised by Attorney General George Savvides for the state.

The court had ruled that the bill violated neither the right to enter a contract freely nor the principle of separation of powers between the executive and legislative branches of government, as was argued by Anastasiades.

The foreclosure freeze will be in effect until the end of January, evoking the tough financial climate created by the coronavirus pandemic and the Ukraine war.

It means that first homes worth up to €350,000, commercial premises with a maximum value of €750,000 and plots of land worth €100,000 cannot be seized.

Both the government and the Central Bank had warned against a new freeze on foreclosures, arguing it would jeopardise the country’s sovereign credit rating.