Article by Vakis Charalambous, member of the C.C. of AKEL and the Economic Policy Bureau of the Party
Sunday 9 April 2023, “Haravgi” newspaper
The rejection of AKEL’s draft bill for a targeted suspension of foreclosures by the majority of Parliament paves the way for accelerating foreclosure procedures. More than 1,100 electronic auctions are already under the hammer.
This is the same proposal that had been previously approved. Those political parties who are voting against it today were voted for it before. They remembered the Constitution, our obligations to Europeans, economic stability and much more.
The question is, of course, quite different: How can there be economic stability without social cohesion?
And social cohesion, in the current framework, cannot exist because:
● Vulnerable borrowers are not protected, while strategic defaulters are content anyway.
● The imbalance between borrowers and banks/investment funds is huge.
● The Central Bank’s code of conduct on restructuring – by general and official consensus – is not respected.
● The insolvency framework is complex and costly.
The transfer of non-performing loans from banks to investment funds does not solve the problem. Instead, it sweeps it under the carpet. Indeed, at a time when interest rates are rising, the risk of an increase in non-performing loans will be much higher.
The suspension of foreclosures cannot provide lasting solutions and this is quite understandable. However, AKEL proposed the suspension of foreclosures because of the absence of any effective protection for borrowers. It is not AKEL that should be held responsible, but the previous government, which for 10 years has been putting off taking any real decisions on the matter.
Since 2014, Nicos Anastasiades has been announcing various plans. The approval of the new state plan ‘Rent for Installment’ is still pending. The previous schemes (ESTIA, OIKIA) did not live up to expectations. The establishment of a Special Court is still being prepared. The balance verification mechanism is non-existent. Cyprus is in the shadow of the European Commission’s decisions on another infringement procedure because there has been no complete harmonisation of EU Directive 3/13/EEC on abusive clauses.
In the meantime…There is an urgent need to strengthen the existing procedures in order to provide a safety net for vulnerable borrowers. AKEL has long tabled a proposal on access to justice for borrowers, demanding a temporary suspension of the sale procedure in cases of unfair clauses and illegal charges. At the same time, AKEL attaches particular importance to the need to find new accommodation before the auction is held. Simultaneously, AKEL has tabled a proposal regulating the voluntary exchange of mortgages for debt, in order to protect the exchange value of the property at the assessed value of the property and not at the value set by banks.
A series of initiatives and proposals will follow with the objective of AKEL making a constructive contribution towards solving this huge problem.
Πλατφόρμα Συνδικαλιστικών και κοινωνικών οργανώσεων «Η κοινωνία αντιδρά και διεκδικεί» πραγματοποίησε σήμερα έξω από το Προεδρικό μεγάλη κοινωνική κινητοποίηση ενάντια στις εκποιήσεις, Λευκωσία 27 Αυγούστου 2014.
