The Cypriot parliament has passed a bill suspending seizures until the end of October. Finance Minister Constantinos Petrides expressed disappointment with the move, saying failure to provide an effective foreclosures framework would “punish” regular borrowers.

The Plenary Chamber adopted the bill tabled by five opposition parties (AKEL, EDEK, the Greens, ELAM and DEPA) with 34 votes in favor and 16 against last week, amending the legislation on transfers and real estate mortgages in order to to extend the suspension of seizures of indebted assets until October 31, 2022, due to the economic and social impact of the Covid-19 pandemic and the war in Ukraine.

The suspension concerns main residences whose estimated value does not exceed 350,000 euros and professional premises hosting companies whose annual turnover does not exceed 750,000 euros. It also concerns agricultural plots whose estimated value does not exceed €100,000.

Petrides, in a written statement, expressed his disappointment at the “voices of populism”, which he said “are once again threatening the credibility and the economy of the country, at a time when any downgrading of the Cypriot economy can turn out to be disastrous.

Any expansion of the foreclosure process, he said, whether through legislation or on a voluntary basis, “primarily protects strategic defaulters at the expense of regular depositors and borrowers.”

The Minister stressed that suspending foreclosures at what he described as a “critical period” for the economy, also risks the introduction of the much-anticipated Mortgage-to-Rent Scheme, budgeted at €400 million, which protects principal residences. vulnerable households, including non-viable borrowers who had applied for the ESTIA debt relief scheme, since its approval by the European Union will also depend on the effectiveness of the foreclosures framework.

“Without the effective tool of foreclosures, there is a visible risk that the program will not be approved by the EU and, in any event, borrowers could again be reluctant to participate,” he added. .

Petrides said an inefficient framework “acts as a punishment” for regular borrowers, poses risks to depositors and reduces valuable liquidity for investment and growth. He then thanked the MPs who voted against the bill.