A TROIKA delegation is set to return to Cyprus within weeks, after international lenders suspended Cyprus’ bailout review in September, pending the passing of foreclosure legislation.
“Technocrats from the Troika will be in Cyprus from January 27 and heads of mission will arrive on February 1 – at the end of the suspension of the foreclosure legislation,” a source within the Finance Ministry told The Cyprus Weekly.
Implementation of the foreclosure legislation means the International Monetary Fund (IMF) can finally release the €86 million, withheld from the Cyprus bailout programme. It will also renew government attempts to return to international market that were twice delayed during controversy over foreclosure legislation.
The complications began on September 6, 2014, when opposition parties added six amendments to the legislation for the protection of creditors – despite the fact that international lenders had made it clear that the amendments were unacceptable. President Anastasiades referred all six changes to the Supreme Court, receiving favourable rulings for four, with parliament accepting to overrule a fifth. The Troika agreed to turn a blind eye on the remaining amendment.
Three days later, Cyprus received €350 million from the European Stabilising Mechanism (ESM) on the condition that there would be no more delays with the foreclosure legislation.
“The government should have returned the [ESM] money,” said Professor Theodoros Panayiotou, who teaches business ethics and is a director of the Cyprus International Institute of Management.
Opposition parties maintained that the government’s failure to simultaneously introduce the insolvency and foreclosure legislation would have left creditors unprotected from the banks and suspended the legislation until the end of January, giving the government time to present the whole package of insolvency legislation to the parliament.
The government rejected the argument that creditors were left unprotected.
Finance Minister Harris Georgiades slammed the suspension of the legislation, describing it as an “unnecessary and unjustified act”.
In an effort to reach an acceptable solution for all, President Anastasiades yesterday met Interior Minister Socratis Hasikos and Georgiades. Anastasiades has already expressed his determination to ensure parliament approves the foreclosure law before January 30.
At the January 12 party leaders meeting Anastasiades will attempt to secure majority support in parliament to back the bailout programme, by offering parties the chance to re-join his administration. DIKO and AKEL have already publicly turned down his proposal.