Insider Economy President sends amended foreclosures law back to House

President sends amended foreclosures law back to House

President Nicos Anastasiades on Friday sent back amended legislation effectively delaying the foreclosures process back to the House of Representatives for reconsideration.

The president also sent back a new law introducing a widowers’ pension without providing for a gradual increase in social insurance contributions to cover the extra cost.

The House Finance Committee will meet on Monday to consider the issue,

MPs can either accept the referral — thereby scrapping the bills or reject it, in which case the president has the option to accept the House decision or sent it to the Supreme Court to rule on its constitutionality.

The government, echoed by banks and business associations had warned that the House decision would have a negative impact on the economy.

On Thursday, Moody’s ratings agency warned that the amendments approved by the House of Representatives to the legal framework governing foreclosures were credit negative and were expected to hamper banks’ efforts to reduce problem loans.

Explaining the reason for the president’s decision, government spokesman Prodromos Prodromou said that the changes to the law intervened with the contractual agreement between lenders and borrowers.

He added that the new scheme Estia aimed at protecting vulnerable home owners from foreclosures should be allowed to come into effect first.

The amendments would affect the stability of the financial system and international ratings agencies have already reacted, he added.

As regards the widowers’ pension, Prodromou said that changed to the initial proposal removing a gradual increase social insurance contributions endangered the viability of the social insurance fund.

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