The Finance Committee will start on March 9 the debate on the proposals for the law concerning the protection of borrowers and guarantors from auctions and foreclosures, with the aim of finding a solution by the end of its term. The Minister of Finance Makis Keravnos was also invited to attend the session.
In his statements, AKEL Member of Parliament Aristos Damianos spoke of the perennial need to restore the balance between citizens and financial institutions.
As he said, "for ten years the AKEL parliamentary group has been demanding fairer arrangements for borrowers and guarantors", pointing out that the main goal is "the balance between the privileges of banks and in the course of acquisition and credit management companies and the minimum rights of guarantors and borrowers".
Mr. Damianou argued that, despite the party's repeated proposals, there was no substantial response, noting that "the permanent alibi was a "will" on the part of the government and especially the DISY and DIKO parties", adding that "alibis are over".
Referring to the social consequences of the existing framework, he spoke of widespread property losses, stating that "thousands of our compatriots have been evicted. Thousands more are on course to lose their homes or family jobs."
As he said, the main proposal of the party concerns the restoration of the possibility of citizens to appeal to justice to protect their main residence and small business premises. He noted that as early as 2018 there were warnings of a violation of fundamental rights, which, he said, were not heeded.
The AKEL Member of Parliament also announced that the issue will be raised again before the Committee, where the Minister of Finance was invited to be present in order to clarify the political intentions of the Christodoulidis government. He added that "before this Parliament closes, we need to know how every political force is positioned in this divestment pogrom that we have been living in recent years".
Mr. Damianou also argued that, based on the current procedures, borrowers and guarantors currently do not have sufficient protection, while he pointed out that many cases are already at an advanced stage and cannot be overturned.
As he said, the aim of the proposed regulations is to limit immediate property losses but also to create a more balanced legislative framework for the future, warning that without changes, citizens may face foreclosures even for limited delays in their installments.
For his part, the President of the Movement of Environmentalists - Citizens' Cooperation and Member of Parliament Stavros Papadouris indicated that the Finance Committee of the Parliament will start on March 9 the discussion of the pending legal proposals on the issue of divestments, pointing out that these are legislations that have been before the Parliament for years and are based on specific data from the Central Bank of Cyprus and the Financial Commissioner.
As he stated, the data shows that a large percentage of the auctions concern primary residences, noting that "55% concern residences below 250,000 euros" and that "below 350 the percentage is at 70%", which, as he indicated, contradicts the long-standing commitments to protect the primary residence.
Mr. Papadouris also said that the majority of the cases concern terminated loans, explaining that in these cases default interest is imposed which further increases the amount of the debt.
He referred to the evolution of the total amount of non-performing loans (NPLs), expressing concern about the increase in the balance despite the divestments and restructurings that have taken place in recent years. As he explained, although credit recovery companies have already managed and reduced loans amounting to around 5.7 billion euros, the total portfolio appears to be increasing due to default interest that continues to burden the debts.
It said that "where loans of 16 billion were bought, today the remaining portfolio stands at 18.5 billion", pointing out that the constant burden of interest rates, which in some cases reach 9% to 12%, leads to an increase in debts even in cases where sales or settlements have already been made.
At the same time, he expressed concern about the operation of the existing framework, pointing out that unlike other European countries where judicial procedures are completed in a short period of time, in Cyprus many years are required for the issuance of final decisions, while sales proceed in a much shorter time.
In conclusion, he warned of an escalation of the phenomenon, stating that "in 2026 we will see things that we have not seen before", stressing the need to review the legislative framework to ensure better protection of citizens.
