News Column

Troika scores 6-4 on foreclosures bill

September 4, 2014



By Angelos Anastasiou

AS THE Troika keeps pushing for closure by the end of this week, yesterday's marathon joint session of the House finance and interior committees failed to produce consensus on the controversial foreclosures bill, which is slated to continue discussion today and put to a plenary vote tomorrow.

The session, which started at 10 am, lasted several hours into the afternoon. Discussion revolved around a working paper containing common amendments tabled by political parties.

Finance minister Harris Georgiades, Interior minister Socratis Hasikos and Attorney General Costas Clerides joined the meeting at noon.

Georgiades informed the gathering of a 10-point letter by the Troika, in which it offered comments on some of the proposed amendments. Information leaked from inside the room suggested that while the Troika implied consent on some points, provided they would not overturn the bill's spirit and functionality, it argued against some of the parties' most critical demands. Reports said the international lenders had agreed to six of the amendments but a flat-out 'no' to the other four.

Key issues that include a proposal to push back implementation of the foreclosure bill's provision to coincide with implementation of the insolvency framework were rejected outright, while another to settle any debt outstanding and release the debtor and any guarantors following property foreclosure "will be discussed within the context of the upcoming insolvency framework."

Further, a suggestion to differentiate between collateralised loans by loan category, as well as a joint proposal by AKEL and EDEK for temporary court-ordered immunity from foreclosure to distressed owners of primary homes and small business premises, has also been rejected.

In contrast, Cyprus' lenders gave the nod to several minor points raised by political parties.

The right to legal recourse, a constitutional right granted every Cypriot citizen, has been approved.

The option to use the Land Registry's appraisal of the property under foreclosure instead of that of a private property appraiser has also been green-lit.

According to the Troika's letter, properties that have been paid for but no title deeds have been issued could be exempt from the bill's provisions, and the House may reserve the right to receive a quarterly update on foreclosures from the Central Bank of Cyprus.

Finally, the Troika has also accepted a condition that bank shareholders may not involve themselves in auctions of foreclosed properties, as well as another streamlining the obligations of commercial banks with those of foreign funds that may buy distressed loans from them.

"On the one hand we must welcome the fact that many of the suggestions made by political parties seem to be viewed positively," said Finance Committee chairman Nicolas Papadopoulos. "There certainly remain disputed points, which will need to be processed and incorporated into the bills. We hope that (today's) session will achieve further convergences."

Papadopoulos declined to offer details on which amendments were accepted or opposed.

"The discussion is ongoing and details matter," he replied.

The committees will reconvene today in order for parties to settle on final convergences ahead of tomorrow's vote, but the Auditor General warned that his office requires sufficient time to study amendments from a constitutional perspective before they are put to a vote.

"Matters of such seriousness should be examined with due care for as long as may be required," he said. "They can't be raised at the last minute and call for a decision under the pressure of narrow deadlines."

But the risk of the Attorney General's office working against the clock aside, another issue may end up casting an ominous shadow.

Although the Troika's letter once again stressed the need to pass the bill tomorrow and left no room for further extensions, citing next week's Eurogroup meeting in Milan on September 12, there was talk during the committees' session that the vote could be pushed to Monday.

Such a decision would likely be met with the Troika's dissent as the vote is scheduled to be followed by the preparation of a report by the Eurogroup working team ahead of the September 12 meeting that will decide on the release of the sixth tranche of aid to Cyprus for which voting the foreclosures bill was deemed a "prior action."

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Source: Cyprus Mail


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