Politicians had earlier attended a meeting chaired by President Nicos Anastasiades to discuss the pending disbursement of €85 million from the EU’s Recovery and Resilience Fund and the bill on the law on the purchase of credit facilities.

The bill’s purpose is to provide access to the databases of the Land Registry and Artemis, with the ultimate aim of facilitating the restructuring of loans and establishing a mechanism for supervision by the Central Bank of credit management companies, for the benefit of borrowers and guarantors.

The meeting also detailed the overall plan promoted by the government since 2015 to protect the first homes of vulnerable households.

The plan included the Estia scheme, where the state covered one third of the eligible borrowers’ repayment plans and Oikia scheme, which provides partial debt write-off to distressed, socially vulnerable borrowers with loans secured with primary residences.

The fiscal cost of the government’s plans to address non-performing loans to protect first homes is estimated at around €0.5 billion.

At the same time, the finance ministry has expressed its willingness to reintroduce a government bill to establish a special court for non-performing loans, but without provisions that would make it easier for the defaulters, hindering the smooth processing of loan restructuring.

Elam MP Sotiris Ioannou said they should proceed with a suspension of divestment until the package of 14 proposals currently before the House finance committee, which was to be discussed a year ago, is considered.

“But under no circumstances are we going to jeopardise the guarantors once again for the sake of any mediated solution,” he said, adding that the discussion would continue on Monday.

For his part, Dipa MP Alekos Tryfonides said that €18 billion of NPLs are in loan management companies and €3 billion in banks.

He expressed his disagreement with the improved bill and said: “Almost all of Cyprus are guarantors and with this bill, all of Cyprus, our children will be under the Damocles sword of the loan management companies”.

Earlier in June, government sources suggested that Cyprus was expected to submit a request to the European Commission for the first tranche of money from the EU’s Recovery and Resilience plan fund around the third week of July.

The first instalment was scheduled to be sent last February but the procedure was delayed due to disagreements between parties over the bill relating to reducing non-performing loans.

More specifically, the disagreements related to a provision in the legislation drafted by the government, allowing debt administrators access to the financial data of collateral providers and loan guarantors.

The Recovery and Resilience Plan’s funds are expected to be disbursed from 2022 to 2026. So far Cyprus has received pre-financing amounting to €157 million in June 2021.

Source: Cyprus Mail