Borrowers’ rights have been put in the Government’s drawer

 

Wrongful interests are hindering harmonization with the European directive

Press release, 19^th March 2021

AKEL MEP Giorgos Georgiou today raised before the European Commission once again the tragic situation that continues to prevail in Cyprus as a result of the systematic violation of borrower’s elementary rights, at the same time as, due to the pandemic and exacerbation of the economic crisis, the suffocating grip of the foreclosure of primary family homes and small business premises hangs over hundreds of wage earners.

More specifically, addressing the Commission, with the procedure of urgency, the AKEL MEP briefed about the criminal violation of the human right to housing because of the absence of a comprehensive housing policy, but also due to the existing legal framework in Cyprus, which fully serves the interests of the banks and does not protect vulnerable groups of the population.

G.Georgiou made a special reference to Cypriot legislation on private auctions, in which the clause for the provision of alternative housing is absent in cases where the foreclosure of a primary family takes place. He also referred to the violation of the right to suspend the foreclosure, until the court decides whether the entire amount claimed is legal or not. Furthermore, he pointed out the state’s obligation to provide legal aid to borrowers, who do not have the economic capability to go to court in order to prove the existence of unfair and illegal clauses in their contracts.

The Commission is therefore called upon to respond, in writing, to the following questions which G.Georgiou raised:

• What action does the Commission intend to take to ensure that the existing unfair and illegal clause can be annulled, as the judgments of the European Court of Justice require?
• What steps will the EU take to protect small businesses in Cyprus too from the unfair and illegal clauses?
• What measures does the EU intend to take so that the violation of the right of those who do not have the financial capacity to go to court is ended?
• How does the Commission intend to act so that the right to suspend foreclosures until the court examines the claim for the existence of an unfair and illegal clause is safeguarded in Cyprus, as well as the right to secure the safeguarding of the right to housing, in cases where there is a foreclosure of a primary family home?
• What does the Commission intend to do about the court rulings that were issued by Cypriot courts, in breach of the prohibition of unfair and illegal clauses, which include charges based on unfair and illegal interest rate clauses or the from annulled loan or mortgage agreements from the beginning, about which the right to set aside the relevant rulings no Cypriot legislation in force provides for?

1. Georgiou also addressed the European Central Bank, asking for clear answers to the following questions he posed:

• What are the obligations of hedge fund companies regarding the implementation of European Directive 93/13 on protection from unfair and illegal clauses and the respect of the human right to housing?
• Why, in compliance with the requirements of Directive 93/13, do Cypriot banks and hedge funds not adopt a binding Code on Restructuring, so as to commit themselves to the removal of charges, as a result of unfair and illegal clauses in contracts, and for a just and legal restructuring of loans to be achieved?