Tuesday, June 7, 2022

AGREEMENT PAVES THE WAY FOR €85m FROM THE EU

 Filenews 7 June 2022 - by Eleftheria Paizanos



After lengthy extended discussions, which lasted more than nine months, the government and the parties yesterday reached a mutually acceptable formula in relation to the two bills aimed at strengthening the legal framework for the management of non-performing loans and governing the licensing and operation of loan servicing companies. The two bills are the last prerequisite for the second tranche from the Recovery Fund, amounting to €85 million.

The parties reached an agreement, adopting safeguards in relation to the control that the loan servicing companies will do on the data of the guarantors, as for months the discussion has been in the course of the amendment of ELAM, EDEK, DIPA and ecologists, which prohibited the access of loan servicing companies to the data of guarantors, through the Artemis system and the Cadastre system.

Yesterday, the issue was discussed in a closed-door session of the parliamentary Finance Committee, with the Ministry of Finance and the opposition parties sticking to their positions. The former argued that the Republic could not be inconsistent with the commitments it made to Brussels, while the latter stressed that they would not withdraw the amendment unless provisions were included to protect the guarantors. In the end, the government, seeing that there is a risk that it will not get a single cent from the Recovery Fund, through which by 2026 it is projected to receive €1.2 billion, has consented to concessions. The two parties decided that the guarantors would be checked under certain conditions and only if necessary. According to information provided by "F", the access of the management companies to the data of the guarantors, to the databases of the Artemis system and the Cadastre, will be done only in cases where it is deemed necessary and after it has been documented.

In particular, a loan servicing company will submit a request to the credit acquiring company to access the guarantors' data in the two databases, after the required arguments have been made. In this way, as we have been told, it is ensured that the measure will not be abused by the credit servicing companies, as through the request submitted to the acquiring companies, guarantors will be more protected. Essentially, the customer relationship that credit acquirers have with borrowers and guarantors and by loan servicing companies will be respected.

The Ministry of Finance has pledged to revise the bill again, including this particular provision. The revised text will then be sent to the Commission, which will evaluate the provisions that will be added to the bill. In fact, if the parties proposing the amendment are satisfied with the wording that will be formulated in the bill, then they will withdraw the relevant amendment. It is recalled that, last month, the European Commission, commenting on the party's amendment, had argued in advance that it goes beyond the target of reducing the volume of non-performing loans.

After yesterday's agreement, the way will be opened for the disbursement of €85 million, after the bill has been approved by the Plenum of the Parliament. However, if the agreements are adhered to, the bill secures a majority, despite the fact that AKEL will vote against it. The parliamentary group of DIKO appears for the moment divided.