APPARENTLY oblivious to the fact that Cyprus will not receive the next tranche of the bailout if the foreclosure bill does not pass into law, the parliamentary debate on the bill continues at joint sessions of the House finance and interior affairs committees in efforts to reconcile political differences.
According to reports the government advised the troika of international lenders of eight amendments proposed by political parties; the troika rejected them all stressing the need to comply with the Memorandum of Understanding (MoU).
Following the troika’s response political parties are now demanding that the insolvency law, which is planned for later this year, is submitted together with the foreclosures bill, which in its current form, will only protect primary residences from seizure until 1st January 2015.
But the government has advised that the insolvency law is a complex issue and its needs more time to work on a bill before presenting it to parliament.
Although the troika said that Cyprus was making “relatively good progress” at the completion of its fifth review of the Cypriot economy, it is clear that Cyprus has failed to achieve some of the target dates it agreed with its international lenders in the MoU:
Paragraph 1.26 – “The authorities established a Task Force to prepare a study assessing the magnitude of registered, but untitled, land sales contracts and underlying mortgages and to develop recommendations by end-June.”
Paragraph 1.27 – “The authorities will, in consultation with EC and IMF and informing the ECB and ESM, prepare a comprehensive reform framework to be endorsed by the Council of Ministers by end-July, establishing appropriate corporate and personal insolvency procedures. A draft of the reform framework as well as an impact assessment of various options on lenders will be completed by end-June, and shared with the EC, ECB, IMF and the ESM. On the basis of that framework, corporate and personal insolvency legislation will be adopted, which will include licensing and regulation of insolvency practitioners by end-December.”
Paragraph 1.28 – “The legal framework in relation to foreclosures and the forced sales of mortgaged property will be amended in consultation with the EC and the IMF and informing the ECB and the ESM, and adopted by end-June, with immediate effect for all mortgaged properties except primary residences (for which provisions will enter into effect by end-December, in line with the adoption of the insolvency legislation), to allow for private auctions to be conducted by mortgage creditors, without interference from government agencies.”
During a conference call following the troika’s fifth review Delia Velculescu, Mission Chief for Cyprus, answered a number of questions relating to the foreclosures bill and warned “this [the foreclosures law] is a precondition for the conclusion of the fifth review with Cyprus. If the law is not passed, the review would not be concluded and we may need to come back to Cyprus and discuss again the situation.”
Meanwhile political parties appear content to continue the bunfight trying to score political points from their ‘adversaries’ – seemingly oblivious to the fact that the foreclosures bill has to be passed into law before Cyprus receives the next tranche of the bailout loan.