AKEL tables draft Bill on non-performing loans

Statement of Aristos Damianou, AKEL Political Bureau member and AKEL MP

AKEL C.C. Press Office, 8th November 2015, Nicosia

 

We do not disagree with the President of the Republic’s placing of the restructuring of non-performing loans (NPL’s) as one of the principal challenges facing the Cyprus economy. Besides, as AKEL we have been stressing the need to speed up a fair and sustainable restructuring of loans for two years now. AKEL disagrees with the covering up of the real reasons that led to the problem, as well as with the downgrading of the severe social problems such as unemployment, emigration and dangerous levels of social misery and poverty, given that the government insists on a supposed “success story” nonexistent for citizens.

The huge and growing to date number of NPL’s, by far the largest throughout Europe, is primarily the result of the so-called “therapy” imposed on Cyprus which included the haircut on bank deposits, anti-social policies of austerity and ongoing cuts in wages, pensions and the dismantling of the welfare state. At the same time, the Central Bank of Cyprus and the Banks also bear a significant responsibility, both for the very slow pace of restructuring, as well as for the terms they are imposing on restructuring plans.

The solution to the dangerous for the Cyprus economy problem of NPL’s cannot be found in the de facto failed recipe of the imposition of even more austerity, but in stimulating economic growth through increased state intervention. Furthermore, the banks must immediately implement a just and viable restructuring of loans of small-borrowers, and not promote the selling of loan packages to the private investment Funds-vultures and consequently to a new haircut on the already suffering victims of the robbery committed by the banks, this time the selling off of primary family homes or their small business premises.

Within this framework, AKEL has submitted a draft Bill for an exemption from the possibility of selling loans, namely those loans below 350,000 euros and which have the primary family home or small business premises of borrowers as mortgage value.