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Supreme Court focuses on foreclosures

Cyprus Supreme Court

The Cyprus Supreme Court

THE SUPREME Court will on Tuesday begin hearing arguments for and against the president’s refusal to sign off on four bills related to repossessions legislation.

President Nicos Anastasiades last week referred four pieces of legislation – passed by the House majority – to the Supreme Court, after having refused to sign them into law on the grounds that they are unconstitutional.

The president has meantime sent back to parliament two other related items. Altogether the six items contain clauses which international lenders have said are incommensurate with the aim of speeding up foreclosures proceedings – designed to help banks recover non-performing loans running in the billions of euros.

Eurozone finance ministers last week said Cyprus would not be eligible for the next tranche of financial assistance unless and until it resolves the question of the six contentious pieces of legislation, which the opposition here are nevertheless adamant on pushing through.

The next deadline is the scheduled Eurogroup meeting of October 13, and the government is locked in a race against time to resolve the matter domestically prior to that date. In the event the hurdle of the offending legislation is overcome, that would pave the way for the Euro working group to inform eurozone finance ministers that Cyprus is on track with its adjustment programme and to recommend the disbursement of the next bailout tranche.

Speaking to Stockwatch, Finance Minister Harris Georgiades said he was hopeful that scenario would pan out.

In addition to the showdown at the Supreme Court, another battle will be unfolding within the corridors of parliament.

On Tuesday the House finance committee convenes to review the two items sent back by the president. Over the coming days, opposition parties must decide on whether to agree to “kill” the items or amend them. But should they insist on their enactment as is, the president would then refer this legislation as well to the Supreme Court. By law, parliament has two weeks to reach a decision either way.

Meanwhile the House plenary this Thursday may serve up yet another twist to the foreclosures saga. It’s understood that main opposition AKEL are mulling inserting an amendment into the government’s core repo bill delaying the bill’s coming into force.

This is presumably possible because, although the bill was passed by the House on September 6, it hasn’t been published in the government gazette and is thus not an enacted law yet.

After a bill has been passed by the House, it takes two weeks for it to be published in the gazette, which for the foreclosures legislation in question would mean this coming Saturday.

That in turn means that this Thursday’s plenary is the last chance to vote on an amendment stalling implementation of the legislation because Saturday, September 20 is the date on which the bill makes it into the gazette.

However it would be pointless for AKEL to even attempt tabling such a revision without the backing – tacit or otherwise – of DIKO.

AKEL are opposed to the standalone enactment of the government’s foreclosures legislation – even though they voted for it – arguing that it must be coupled with passage of bankruptcy legislation providing a ‘safety net’ to financially vulnerable mortgagors.

DIKO itself has gone silent since the Eurogroup’s thumbs-down last week, but the other opposition parties are ratcheting up the pressure.

In a defiant statement, the Greens lashed out at Cyprus’ international lenders, accusing them of wanting to “foist the yoke of slavery on the Cypriot people”.

The Greens called on political parties to form a united front against the troika in order to head off total devastation of the economy through ill-advised measures such as mass foreclosures.

Socialists EDEK reiterated they would not assent to the enactment of the government’s foreclosures legislation unless the complementary bills are also enacted.

Government sources said yesterday that when the foreclosures issue is resolved, Cyprus will have only two more major hurdles to overcome – the privatisation of semi-government bodies and the adoption of the NHS. It is hopeful that by autumn next year, Cyprus would be free of the troika, the sources said.