Deliberate scaremongering by the government regarding the protection of the primary residence

Statement by Aristos Damianou, Head of Legal Affairs Department of the C.C. of AKEL, Member of Parliament 

AKEL C.C. Press Office, 7th April 2014, Nicosia

 

The deliberate scaremongering and demonization being promoted over the last 24 hours on the draft Bill to protect primary (family) residences and small business premises from repositions/appropriations is unacceptable and unsubstantiated. Besides generalisations, the devotees of the suspension – if not the postponement – of the enactment of the draft Bill for the protection of the primary residence, have not put forward a single well-substantiated argument to justify their demand, nor do they have an alternative proposal.

Instead of scaremongering the government and ruling forces should have been preparing a Bill to protect the primary residence, as President Anastasiades had publicly pledged to do so for months. They did not do so because in reality they disagree with such a Bill. The government is saying one thing and the Democratic Rally party another. The Minister of Finance is saying one thing and the the President of the Republic another.

The Central Bank, despite minor differences, in a letter dated 22nd January 2014, agreed with the attempt of the Parliamentary Legal Affairs Committee and indeed proposed that this effort should involve a “Decree suspending the sale of primary residence or commercial immovable property for small businesses.” It also submitted a memorandum to us with improved proposals which the two parties, AKEL and EDEK social democratic party, incorporated in the draft Bill they are to table. The stress tests being invoked today by the government and ruling forces as the reason for postponing the vote in Parliament, which are also connected with the capital adequacy, were set from last year and consequently there isn’t some new evidence that would justify reversing the official position the Central Bank backed until a few weeks ago.

There have been many misleading comments. The first deception being promoted is that cunning forces will abuse the law wanting to get out of paying their debts. These forces will simply fail to obtain a court order, as they will have to prove that their failure to pay is due to the crisis and existed since 2009. The second deception: that the Bill would protect the mansions and “palaces”. Mr. Neophytou (Note: the President of the governing Democratic Rally party), the right to protection will concern the poor and the middle class who do not live in spacious villas The third deception: supposedly young couples according to the Bill will not be able to get housing loans. We put the question: are such housing loans given today? Moreover, neither the Bill for the protection of the primary residence, nor the decree suspending the sale will be valid indefinitely. There will be a strict time limit. The fourth deception promoted is that the capital reserves/adequacy of banks will be affected. The court decree will not nullify neither the mortgage, nor the procedure for the bank to receive its take. The Bill will suspend temporarily and therefore banks’ warranty will remain unchanged.

Things are very simple. We want to give people a final possibility, after exhausting all possibilities for mediation, settlement or restructuring with the bank, and only then could they take recourse to the courts as the last resort, to suspend the confiscation of their primary residence or small commercial enterprise.

The truth is quite different. Currently bankers, politicians and others beyond the Left are discussing with investment funds for bulk purchases of non-performing loans, as happened in other Mediterranean countries: mass, indirect sales through purchasing group portfolios and the packaging of non-performing loans. In short, we are talking about a return to feudalism with acquisitions from multinational funds in a Cyprus where a third of its territory is occupied by Turkey.

With regards the process, the misleading impression is again promoted among the public that now the Legal Affairs Committee will reconsider its position. The political parties last week expressed their position. The issue will come before the plenary of the House of Representatives on Thursday. If the government and DISY party have alternative proposals, let them table them until then.

We remain committed to the position that in the absence of the government’s will to prevent the tragic phenomenon of repossession of family homes or small business premises, the House of Representatives cannot remain indifferent.