EUROGROUP president Jeroen Dijsselbloem, who chaired yesterday’s Eurogroup meeting, said that the suspension of the foreclosures law by opposition parties was a hurdle to the Cyprus bailout programme.
“The foreclosure framework is the hurdle right now. This framework is needed to let banks clean their balance sheets and get back to their core business of lending money to the economy, given the very high ratio of non-performing loans. So this is an important element in the economic recovery program for Cyprus,” he said.
Adding that “If and only if this hurdle can be overcome, the program can be brought back on track. This is why we call on all involved Cypriot decision-makers to implement this framework as soon as possible.”
Echoing Mr Dijsselbloem remarks, Economic and Financial Affairs Commissioner Pierre Moscovici called for the law to be implemented without any further delay.
“I would also like to underline the importance of the authorities implementing without any further delay the Foreclosure Law, which has been suspended again recently by the Cypriot Parliament. This is an essential step towards addressing the problem of non-performing loans, which is the main challenge for the Cypriot economy at this time.
“So on behalf of the Commission also, I would like to strongly urge all actors in Cyprus to put an end to this uncertainty and to clear the way for a sustainable improvement in the health of the financial sector in Cyprus, which is the only way to steer Cyprus back towards jobs and growth,” he said.
Opposition parties, which have a majority in Parliament, have suspended the implementation of the foreclosures law until 31st March claiming that in doing so they are protecting ‘vulnerable groups’ until the insolvency framework is in place.
But many have questioned their motives suggesting that they are protecting big borrowers, mostly developers, and not ‘vulnerable groups’ as they claim.
Their motives were further questioned over the weekend by an article in the Greek-language newspaper Politis, which reported that 30 big debtors from 45 companies had non-performing loans amounting to €5.26 billion with the Bank of Cyprus; half of all the non-performing loans held by the bank.
In December, Cyprus Finance Minister Harris Georgiades said that the suspension of the foreclosures law “critically undermines our country’s credibility,” calling it “an unnecessary and unjustified act.”
Reacting to the suspension, the Troika of international lenders suspended the bailout programme until Cyprus complies with the terms it had agreed in the Memorandum of Understanding (MoU).
Exactly Deanna! Their silence on this is deafening. If they are well aware of this situation they have been very careful to avoid even commenting on it, never mind doing something about it. Was it not a condition of the MOU to have all but a maximum of 2000 deeds issued by the end of 2014.
I for one find it very worrying that they have not followed this up. Yet, they are withdrawing funds in regard to foreclosure law delays.
I read every day how the big developers are being protected by various politicians. It should be remembered that a vast amount of their assets the banks are after, are in fact, the already sold properties.
I fear that is why the Troika are not willing to get involved.
I think it will be left to the courts to decide and that will be a long, stressful and no doubt expensive road for most.
The Troika could immediately solve all this uncertainty re paid-for properties with no Title. All they have to do is DEMAND that the outstanding Titles are issued IMMEDIATELY and then follow with foreclosures.
Pierre Moscovici was inadvertently correct when “strongly urging all actors in Cyprus to put an end to this uncertainly”. The actors have been performing their amateur dramatics for far too long and are finally the subject of the Troika’s decision to suspend further tranches of bail-out finance until these people start to comply with the terms of the MoU.
Harris Georgiades, meanwhile, thinks their behaviour “critically undermines our country’s credibility” but fails to appreciate that Cyprus has no credibility left anyway to be so undermined and thus the drama continues while those without title deeds are left in a state of suspended animation as to the fate of their homes.
When will this nightmare ever end?
I am in no doubt that MPs are protecting their developer friends and party patrons rather than so called vulnerable groups.
However, when and if enaction of this legislation takes place I am also of the opinion that there will be collateral damage in as much as some will stand to lose (their) homes as a result. The sticking point is ‘their homes’ as if they do not hold title then it is not theirs at all despite in some cases of having been paid for in full or via a fully serviced loan. I would like to think no court in Cyprus or Europe would permit those homes to be repossessed. However if the requirement to issue title to all such homes has not been complied with by land registry, as demanded in the MOU, then the risk remains.
If no one paid for any property without transfer of title at point of sale then they would ensure title is transferred. It’s not too difficult but I very nearly fell foul of the system myself (and I speak the language, am Cypriot and am aware of all the scams) but still I trusted the so called professionals – big mistake, but fortunately I managed to secure title in my name within the week but not by remaining as Mr Nice guy I’m ashamed to say. No title – no sale.
@Mike on 2015/02/18 at 9:28 am – You’ve highlighted the main ‘unknown’ in all of this, will the banks seize property that the purchaser has paid for in full (or is paying via a loan) and I can assure you that the Troika are well aware of this issue.
If the banks do start seizing property that has been paid for, I can see it resulting in civil unrest and the island’s property market will never recover from the fallout. You can be sure that hundreds of cases will end up in the European court.
This is potentially a good sign – that the Troika are finally sending out the right message at last!
I am convinced that we owners affected by the property scams – (perpetuated by the continued seeming inability/unwillingness of bodies like the Cyprus Consumer Protection Service/European Commission etc. to openly demonstrate that they are on OUR SIDE) – will act in a more cohesive way once some “backbone” from those with the political power to change things is in evidence!
A large dose of “Churchillian” resolve is needed NOW!