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Insolvency framework vote next week

Insolvency framework vote next weekAFTER the usual shenanigans we’ve come to expect from opposition parties, a plenary session of the House of Representatives will meet on April 17 to discuss and vote on the five draft bills comprising the insolvency framework.

Opposition parties objected to the date because President Anastasiades plans to be in Athens on the 17th reducing the number of MPs voting against the bill as the House Speaker Yiannakis Omirou (who objects to the bills) would stand in for the President. However, as it’s the House Speaker privilege to call a plenary session, Omirou could have called the meeting for a different date if he wished.

The plenary session will also deal with the referral of the Law on property buyers to whom no title deeds have been issued because their developer is unable to pay the bank or is in liquidation – and the lifting of the suspension of the foreclosures law.

The Finance Ministry has circulated a letter to all MPs warning them of the consequences that some of the proposed amendments to the insolvency bills will put the banking sector at risk if they are approved.

The Ministry is particularly worried by amendments put forward by the Communist AKEL party, enabling those who have been hit by the financial crisis to appeal to the courts to have repossessions against them frozen. Such amendments would obstruct the banks from putting pressure on strategic defaulters to repay their debts resulting in the banks being forced to increase their bad loan provisions, thereby reducing their liquidity.

Meanwhile, writing in the Financial Mirror, General Manager of FOX Smart Estate Agency George Mouskides in the Financial Mirror says that political parties must allow banks (by voting the relevant legislation) to chase the mega borrowers who do not service their loans. We must not allow seven developers, five politicians, three ex-bankers and one union to enforce the island’s monetary and banking policy.

Non-performing loans weigh in heavily on the country’s economy and must be prudently managed if lower interest rates are to achieve their intended purpose.

5 COMMENTS

  1. Does it mean I should pack my bag and prepare to give away my keys from 500,000 EUR house to BOC because my developer did not pay his debt on land however I am still serving my loan and most likely to continue to pay out to BOC being homeless?

    Should I also continue to pay my taxes around 45,000 EUR annually to allow President to enjoy Greece?

    “The plenary session will also deal with the referral of the Law on property buyers to whom no title deeds have been issued because their developer is unable to pay the bank or is in liquidation – and the lifting of the suspension of the foreclosures law”.

    Thanks,
    EU – expat

  2. Quote Mr Mouskides…. “We must not allow seven developers, five politicians, three ex-bankers and one union to enforce the island’s monetary and banking policy.”

    Quite.

  3. @ Pippa. Loved your sentiment, so eloquently expressed! To sort out the mess, needs the President to get a grip and bang a few heads together. Strategic defaulters are the primary villains to be pursued whilst those who have paid in full, yet not been given their Title Deeds, need the protection of the law. Surely it cannot be beyond the wit of even Cypriot politicians to come up with suitable legislation to achieve this simple objective.

  4. Instead of traipsing round the world at the tax payers expense would not the president’s time be better spent sorting out the mess that is Cyprus?

  5. This is the defence by the banks who do not want this bill to go through. No wonder.

    (Such amendments would obstruct the banks from putting pressure on strategic defaulters to repay their debts resulting in the banks being forced to increase their bad loan provisions, thereby reducing their liquidity.)

    In most cases the strategic defaulter is the developer. Why should the bank be given the power to chase the purchaser for debts incurred by the developer during the build program. The developer had been paid in full for the properties. The banks lent money against a development without consulting the purchasers on any matters.

    This argument will go on and on until the banks get their own way. Carry on the good work AKEL

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