Cyprus Parliament approves foreclosures law
A significant mobilization by the Cypriot government and the Central Bank of Cyprus this week regarding the framework of foreclosures bore fruit. It primarily aimed to withdraw the “problematic” proposal that, according to the state and banks, would have negative consequences for the Cypriot economy.
On Thursday, the Parliament voted on two out of the four legislative proposals concerning foreclosures, which were included in the package of seven measures sent by the Ministry of Finance to Parliament for the “smooth handling” of the whole issue.
The remaining legislative proposal, which allows debtors to appeal to a competent court to suspend the foreclosure process until the exact amount owed is determined, is expected to be discussed again on Monday, during the last session of the Economy Committee before the summer recess.
By October, there will be an intensification of efforts to strengthen the foreclosures framework, as the “very bad” scenario of the legislative proposal that could halt a foreclosure until the exact amount owed is determined has been avoided. In the next four months, the situation will be as follows: political parties, the state, the government, banks, credit acquisition companies and domestic supervisors will seek to find a compromise so that the foreclosure system can function, while borrowers have sufficient support and protection. The goal is to find a solution to all the open issues related to the framework of foreclosures.
The government has certainly made some concessions regarding foreclosures. Among the seven government actions to address nonperforming loans, two legislative proposals submitted by the political parties were included, which were essentially the proposals voted on in the plenary on Thursday.
Two days earlier, on Tuesday, all relevant stakeholders had gathered at the Presidential Palace, and it was decided to suspend first residence foreclosures up to 350,000 euros until the end of October.
The combination of the seven government actions, along with the decision to suspend first residence foreclosures, and all of this under the framework of the rental scheme against installment, which received approval from the European Commission, bought the necessary time to address the whole issue.
