InsiderEconomyNew government passes first crash test, foreclosures not suspended

New government passes first crash test, foreclosures not suspended

The new Nikos Christodoulides administration seems to have passed its first crash test after the House plenum on Thursday voted against another extension to a freeze on property repossessions.

This gives the new President, who won last February’s elections, a breathing space to come up with its own proposals to assist distressed debtors.

In his pre-election campaign, Christodoulides had made clear he was against the suspension of foreclosures.

However, even though the foreclosure bill was not voted in, it has become obvious that things will be difficult for the new government when it comes to reaching a parliamentary agreement on crucial issues.

And that a lot of behind-the-scenes dealing and wheeling will be taking place before a government-proposed bill succeeds in securing a majority vote before the plenum.

Regarding Thursday’s bill, the previous halt on foreclosures had already lapsed at the end of January – meaning that property repossessions have since legally resumed.

Main opposition Akel, the Greens and socialist Edek MP Costis Efstathiou had tabled a bill to renew for another three months the moratorium on property repossessions by banks.

But the bill on Thursday was defeated in a vote of 19 for, and 22 against with the help of Disy, Diko and Dipa.

According to the bill which was rejected, foreclosures would be suspended until June 10, 2023, for a main residence worth up to €300,000, business premises with a turnover of up to €750,000 a year and agricultural land up to €100,000.

Nicolas Papadopoulos, president of Diko, the biggest party that supports the new government, called on MPs to give the new government time to come up with proposals for a comprehensive solution to the issue of non-performing loans, asking for a period of fifteen days for them to do so.

But other MPs, especially from parties that proposed the three-month suspension said that they couldn’t wait, since after the end of the previous halt in foreclosures at the end of January, the banks and especially credit-acquiring companies are after borrowers who can’t pay their loans.

The Plenary also rejected an alternative proposal put forward by Papadopoulos, for a one-month suspension of the foreclosures.

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