As political parties maintained their reservations over the bills approved by the cabinet last week, the outcome of the vote appears to be depending on Estia, a scheme designed to help vulnerable households and corporations repay mortgages.

The Disy-supported government indicated its willingness on Monday to accept proposals tabled by Diko on side aspects of the laws in order to gain its support to have the bills, which aim at facilitating the faster reduction of delinquent loans in the banking system, passed.

The approval of the bills is also a condition for the European Commission to approve the sale of the Co-op’s operations to Hellenic Bank, including €9.7bn in deposits, much of which is guaranteed by the state which will in turn have to compensate depositors in the case of the state-owned bank’s resolution which further increased depositor concern.

Even as members of the finance committee were debating the legislation, queues outside branches of the Cyprus Cooperative Bank showed no signs of a let up on Monday. Members of the public were trying get out as much cash as they could, sometimes getting frustrated with the €3,000 cap.

In some instances, the queue extended outside of the bank’s entrance with people abandoning one branch to go to another only to face the same story.

One elderly lady said she didn’t believe the government’s assurances and was taking her money out to give to her children so they could go on holiday.

“Instead of leaving it their for the bank to eat up, I might as well let my kids enjoy it,” she said.

“Our framework is under evaluation,” Andreas Charalambous, head of the finance ministry’s financial stability directorate told lawmakers of the finance committee on Monday according to CNA. “This is not an attempt to scaremonger (but) they are making assumptions on how quickly one can recover his money from immovable property; if it takes time, this is translated to equity.”

A representative of the central bank said that assumptions and capital requirements are a function of the time a loan is in arrears.

The chairman of the finance committee and president of Disy, Averof Neofytou warned that while the foreclosure law, one of the laws the government wants amended, is “lenient” possible amendments to the proposed bills could have “disastrous” effects on future generations.

Neofytou also said that he considered that it is important not to send the message to borrowers repaying their loans that “they should consider themselves suckers and that so called smart people take advantage of the system’s weaknesses by not paying back their debts, spending a more comfortable life at the expense of less privileged citizens”.

While Akel, the largest opposition party with 16 deputies, indicated that it was unlikely to vote in favour of the bills, a Diko lawmaker said that his party would likely vote in favour. With the impasse over one of the seats won by Solidarity in the past parliamentary elections continuing, thus reducing the number of lawmakers to 55 in the 56-seat parliament, the 18 votes of Disy and the 10 votes of Diko would be sufficient to form a majority without the government having to rely on other minor parties or maverick lawmakers.

Giorgos Perdikis, the chairman of the Greens, said that his party will decide after studying the bills including on Estia and the body managing non-performing loans.

Stefanos Stefanou, a deputy of Akel, the communist party that traditionally opposes foreclosures, criticised the government for exploiting the sale of the Cyprus Cooperative Bank as an opportunity to argue that the problem lay with non-performing loans.

“Therefore, it brought in express procedures five draft bills to the parliament and is trying to have them pass without any substantial debate,” he said and added that his party would not accept having the bills put to a vote on Friday in support of the government’s “one-dimensional” policy benefiting banks.

Angelos Votsis, a deputy of Diko, said that after the government approved his party’s proposals for legislative changes on the management of non-performing loans, what remains to be seen is how the proposals will be incorporated into the laws.

Source: Cyprus Mail