Government flagrantly violating borrower’s rights and risks Cyprus again being brought before European courts
Statement by AKEL MEP G. Georgiou at the press conference on foreclosures and unfair illegal clauses
AKEL C.C. Press Office, 28th November 2020, Nicosia
Given precisely what the General Secretary of the Party referred to, namely the lack of political will on the part of the government to solve these problems, the absence of an adequate legislative framework and the long-standing practices of Cypriot banks, we put questions before the European Commission on the issues regarding foreclosures and unfair and illegal clauses.
In the replies we received from both the Commissioner for Employment and Social Affairs Marianne Thyssen on 12th November 2019 and the Vice-President of the European Commission Valdis Dombrovskis on 28th November 2019 important suggestions and admissions were made.
They stressed that both Directive 2014/17/EU of 2014, as well as the Charter of Fundamental Rights, including the right of residence (Article 7), as well as the right to an essential recourse to justice (Article 47), include obligations both of the creditors, as well as of the national courts in the direction of providing support to consumers for effectively protecting the right to housing before foreclosure proceedings are initiated.
In the case of Cyprus, the Commission is currently carrying out checks on the compliance of member state’s legislation and, if necessary, it can initiate infringement proceedings.
We came back with new questions and on July 23, 2020, we addressed the Commission again, with the urgency procedure, informing it about the dramatic situation prevailing in Cyprus with the unfair and illegal clauses and the violation of the borrowers’ right to lodge an appeal.
In his reply dated 6th October 2020, EU Justice Commissioner Didier Reynders made the following important revelations:
- Since 2013, the Commission had initiated infringement proceedings against Cyprus, as it found that the Cypriot authorities were not effectively implementing Directive 93/13/EEC on unfair and illegal clauses.
- As not all complaints were resolved, the Commission repeated the infringement procedure in July 2019 and sent an additional letter of formal notice to Cyprus.
- It has been proved that the administrative decisions of the Cypriot Consumer Protection Service, that were issued in relation to unfair and illegal contractual clauses are not enforceable and that only a few cases have been brought before the competent courts for the issuance of precautionary measures or a restraining order.
- The Commission is currently assessing whether this situation undermines the practical effectiveness of Directive 93/13 / EEC.
- If the Commission receives sufficient evidence that will prove that Cyprus is in breach of its obligations under Articles 6 and 7 of Directive 93/13/EEC to provide consumers with legal remedies and procedural guarantees, then it will consider taking appropriate measures, which may include the initiation of separate infringement proceedings.
It also referred to the future Directive on representative lawsuits for the protection of consumer’s collective interests, which the European Parliament and the Council had agreed in June 2020. This directive will, for the first time, lay down rules at the level of the EU that will enable consumers to collectively defend their rights.
The admissions and suggestions of the Commissioner for Justice are of particular importance today, where the complaints of our fellow citizens about the unfair and illegal decisions by the banks are increasing, while many households and small and medium-sized businesses have been brought to their knees because of the pandemic crisis and are facing the danger of foreclosures.
It is now absolutely clear that as long as the Government refuses to implement these European directives, it is flagrantly violating the rights of borrowers but, at the same time, it is also exposed and risks once again of being brought before the European courts and to suffer sanctions.
