As in the EU, so in Cyprus too the government should support the borrowers
Statement by AKEL Political Bureau member & Head of Economic Policy H. Polycarpou
21 July 2023, AKEL C.C. Press Office, Nicosia
Nine EU countries have already taken measures to support borrowers to cope with the increase in interest rates and as many others are in the process of elaborating measures. This is confirmed by an investigation carried out by the House of Representatives following a request of the General Secretary of AKEL Stefanos Stefanou on the relevant matter.
If the Christodoulides government had the political will to support society, it could look into the findings of the study and make use of them. Instead, it continues to hide. Without any plan in place, the government refuses to take action – despite all the pledges it made during the election campaign – and is pinning all its hopes on the supposed “goodwill” of the banks.
But society knows where the “good intentions” of the banks have led us in the past. For that reason, society expects the state and government to take on their responsibilities by implementing specific measures such as:
- Firstly, the preparation of a scheme for regulating debts and covering part of the interest on loans for primary homes and commercial premises, in the case of big increases in the lending rate.
- Second, the setting of a cap on interest rates for mortgage loans, particularly in hedge funds that have no cost of deposits.
- Third, making use of the possibilities of the Central Bank code for a partial freezing of instalments and the transfer of payments at the end of the loan.
We do not expect banks to pursue social policy. This role belongs to the state and that is precisely why it should support society effectively.
