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MEP questions compliance with MoU (update)

UNDER the terms of the Memorandum of Understanding (MoU) agreed between Cyprus and the troika, the island’s government is obliged to publish quarterly reports of progress on a number of key parameters.

However, the first of these published progress reports (see Title Deed issuance progress and mortgages) fails to meet the requirements of the MoU.

In a written question to the European Parliament, MEP Daniel Hannan has asked the Commission what action it is taking, or proposing to take, to address this matter.

Question for written answer E-012351-13
to the Commission

Rule 117
Daniel Hannan (ECR)

Subject: Cyprus Memorandum of Understanding

The Cyprus bailout Memorandum of Understanding (MoU) states the following:

‘By [Q4-2014], eliminate the title deed issuance backlog to less than 2,000 cases of immovable property sales contracts with title deed issuance pending for more than one year. The authorities will enhance cooperation with the financial sector to ensure the swift clearing of encumbrances on title deeds to be transferred to purchasers of immovable property, and implement guaranteed timeframes for the issuance of building certificates and title deeds; publish quarterly progress reviews of the issuance of building and planning permits, certificates, and title deeds, as well as title deed transfers and related mortgage operations throughout the duration of the programme.’

Cyprus has just published the first quarterly progress review, which does not meet the requirements of the MoU.

For instance, title deeds transferred to purchasers, among other requirements, are simply not reported. Furthermore, given the reported 3,521 quarterly title deeds ‘issued’ for the second quarter, which are in any case issued in the developers’ names and cannot be transferred to the buyers until all encumbrances are removed, it is clear that the deadline of Q4-2014 for eliminating the backlog of over 100,000 cannot be met.

It would therefore appear that Cyprus currently has little intention of complying with the requirements of the MoU. What action is the Commission taking, or does it propose to take, to address this matter?

Answer given by Mr Rehn on behalf of the Commission (added)

It is correct that at July’s first review mission of programme conditionality, the Cypriot authorities met the MoU requirements only partially on the elimination of title deed backlogs, as reflected in the September Compliance Report:

http://ec.europa.eu/economy_finance/publications/occasional_paper/2013/pdf/ocp161_en.pdf

The Commission is currently working with the Cypriot authorities to improve the reporting so that the public is fully informed in the shortest feasible timespan.