Filenews 20 March 2022 - by Eleftheria Paizanos
The members of the House Standing Committee on Finance will make another effort tomorrow, Monday, to overcome the obstacles for the bills concerning the licensing and supervision of credit facility management companies, in order to effectively manage non-performing loans.
A thorn in the approval of the bills is the desire of MPs to protect the guarantors from the loan management companies, which will have access to their data through the Artemis database and the database of the Department of Lands. These bills are the only prerequisites of the second tranche from the Recovery Fund that Cyprus has not implemented in order to disburse the €85 million. from the European Union, as the second tranche for Cyprus from the Fund.
Based on the planning and commitments given by the Republic in Brussels, the two bills, along with 13 other milestones, had to be implemented by December 31, 2021. This has not been done, with the result that European technocrats are asking the Cypriot authorities for information on the delay that is taking place.
A few days ago, technocrats of the Ministry of Finance had a teleconference with officials of the competent directorate of the European Commission. EU officials had asked to be informed of the reasons for the delay in the adoption of the relevant bills. In fact, they made it clear to the officials of the Ministry of Finance that they will not accept changing the substance of the bills.
The Director General of the Directorate General for Development, Theodosis Tsiolas, told "F" that the EU asked to be informed about the problems that exist and the two bills are not approved by the Parliament. He said it has been explained to the Europeans that the delay in disbursing the second tranche is due to the Parliament. As he said, what was in the jurisdiction of the executive has been implemented, pointing out that the other bills related to the second tranche and approved a few weeks ago by Parliament have been pushed through for scrutiny in the EU to examine whether they are meeting the commitments made by the Republic. Mr Tsiolas said that it is unknown when the country will get the money of the second tranche from the European Union, since, as he said, everything depends on the decision taken by the Cypriot Parliament.
The controversial bills are likely to be brought to plenary on Thursday 31 March, but the road will be long, until Cyprus gets the money. According to the Director-General of the Directorate-General for Development, two weeks after the adoption of these bills, they will be forwarded for scrutiny to the European authorities, which will examine whether they are in line with the commitments and the philosophy demanded by the Europeans. The Commission will then also need the appropriate time to complete the examination of the relevant texts. Therefore, as the data show, but also because of Easter, some clarification will be required regarding payment of the second dose.
All in the air
Asked by "F", Mr. Tsiolas was asked what would happen if the Parliament proceeds with substantial changes to the two bills on the framework for the management of non-performing loans, he estimated that the European Commission will demand that they be amended again, so that they can return to their original form. At the same time, Mr. Tsiolas wondered how the country will be able to apply to the EU to receive the €85 million, at a time when the Parliament will change the substance of the bills. As he said, Parliament should be formal with the commitments given by the state to the European institutions.
Last month, the Director General of the Ministry of Finance, George Pantelis, had sent a letter to the members of the Finance Committee, stating that if the EU, when examining the request for funding from Cyprus, finds that the milestones and targets have not been satisfactorily met, then the payment of all or part of the financial contribution will be suspended, by a relevant decision of the EU institutions.
It is worth noting that this week the Council of Ministers approved the penultimate prerequisite, which concerned two new sponsorship plans of the Ministry of Energy, totalling €49 million, for the Energy Upgrade of Small and Medium-sized Enterprises (SMEs), Non-Profit Organizations (NGOs), Local Authorities and Bodies of the Wider Public Sector. The projects will be funded by the EU Recovery and Resilience Facility.
We escaped the katsada
For the good fortune of Cyprus, it is not the only country that is inconsistent with the observance of the timetables, as so far only 2 to 3 countries have submitted their request to receive an instalment from the Recovery Fund on time. Due to this development, there have been no strong recommendations from the EU to our country. However, due to the delay, it is not excluded that Cyprus will receive the second and third instalments at the same time in August.
Although the landscape has not been resolved with the second tranche, the Ministry of Finance has begun preparing for the implementation of the prerequisites for the third tranche. By June 30, another 18 milestones will have to be implemented, five of which concern legislation, so that the country will receive another €85 million in August. by the Commission.
What will Members do with the scrutiny of the guarantors?
Tomorrow Monday, in the Parliamentary Committee on Finance, in addition to discussing the two controversial bills on red loans, two ex officio issues will be discussed, so that MPs can get a complete picture. Specifically, the MPs of AKEL Aristos Damianou, Andreas Kafkalias and Christos Christofides, as well as the MP of DIPA, Alekos Trifonidis, registered a matter concerning the operation of the Cyprus Asset Management Company (KEDIPES), the government's decisions for its transformation and the influence of public finances, borrowers and employees of KEDIPES.
Also, there will be a discussion on an issue written by DIKO MPs Christiana Erotokritou and Panicos Leonidou, concerning the lengthy procedures, difficulties and problems faced by borrowers during the examination stage of loan restructuring requests and the possibility of abuse by credit acquiring companies of their dominant position in violation of the law.
As for the two bills on red loans, the opposition parties are demanding that the guarantors be safeguarded and that the loan management companies do not have access to their data, through the "Artemis" database and the Land Registry.
On the table is still the amendment of ELAM, THE DIPA and the Ecologists, which puts the brakes on the control of the guarantors. The Ministry of Finance, in an effort to satisfy the parties, proceeded several times to revise the bills. In particular, it excluded from the control of management companies affiliated persons and collateral providers. On the issue of guarantors, the ministry included a provision whereby credit acquirers and management companies will not have access to the data of guarantors only when a final court decision has been issued annulling the guarantee agreement, which includes unfair terms.
There should also be the explicit consent of the person concerned in such cases. In addition, another provision has been added whereby credit acquiring companies and managers, in their relations with borrowers and/or guarantors and/or collateral providers, should act in good faith, fairly and professionally and provide borrowers and/or guarantors and/or secured providers with information that is not misleading; unclear or false. In addition, they should respect and protect the personal information and privacy of borrowers and/or guarantors and/or collateral providers and communicate with borrowers and/or guarantors and/or collateral providers in a manner that does not constitute harassment, coercion or undue influence.
