Vote on foreclosures bill nears in Cyprus

Vote on foreclosures bill nears in Cyprus

NICOSIA - Agence France-Presse
Vote on foreclosures bill nears in Cyprus

Demonstrators hold banners, reading in Greek ‘Hands off our homes’ and the right showing the Cyprus’ President Nicos Anastasiades, in Nicosia. AP Photo

International lenders will withhold the next payment in Greek Cyprus’s 10 billion euros bailout unless parliament this week passes a crucial law speeding up foreclosures of non-performing banks loans (NPLs).

Around 45 percent of loans by Greek Cyprus banks are classed as non-performing because borrowers are seriously late with their payments and under current laws it can take banks 20 years to regain the loan through the courts. Greek Cyprus’s level of NPLs is the highest in Europe at almost 140 percent of GDP, the International Monetary Fund has said.

The troika of lenders, the IMF, European Commission and European Central Bank, say unless the new law is passed the NPLs must be classed as non-recoverable and Greek Cyprus banks will fail EU stress tests due in the autumn.

Parliament has several times delayed a vote on the foreclosures bill amid opposition fears it could lead to owner-occupiers being evicted from their homes.

The center-right government of President Nicos Anastasiades says the bill is targeted at major business borrowers who owe the bulk of the money.

The next 436 million euros tranche of bailout money is due in late September and the troika has said the foreclosures bill must be passed at a session of parliament scheduled for Sept. 5. The fate of the draft law remains very uncertain. MPs from Anastasiades’ ruling DISY party are expected to vote in favor of the bill but it needs the support of allies DIKO, headed by Nicolas Papadopoulos.

Other parties are expected to oppose the bill and Papadopoulos has proposed many amendments.