Filenews 19 June 2022 - byEleftheria Paizanos
Brussels accepted the agreement reached between the Ministry of Finance and the parties on 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. This is the last prerequisite that was to be implemented on December 31 2021 for the disbursement of €85 million from the Recovery Fund.
The approval of these bills focused on the issue of guarantors and the access that loan servicing companies would have to their data. A source from the Ministry of Finance told "F" that the European Commission (EU) has received an explanation about the formula found between the ministry and the parties and has been satisfied with the clarifications that have been given. He also said that preliminarily the Commission has accepted the new revision of the bills. However, the EU has reportedly pledged to convey its final and official position when the legislation is adopted and sent to it for scrutiny, to see whether they are in line with the commitments made by the Republic in the National Recovery Plan.
In the revised bills that will be forwarded to the Parliament, a new provision has been included, according to which the access of the management companies to the data of the guarantors, to the databases of the Artemis system and the Cadastre, will be made only in cases where it is deemed necessary and after it has been documented. It is worth mentioning that, under the agreement between the two parties, a loan servicing company will have to submit a request to the credit acquiring company to have access to the guarantors' data in the two databases, after the required arguments have been made.
All on the table
However, ELAM, EDEK, DIPA and Ecologists have not withdrawn the controversial amendment prohibiting loan servicing companies from having access to the data of guarantors through the Artemis system and the Cadastre. As they told "F", they will only withdraw it if they are fully satisfied with the new provision that will be included in the bills.
Despite the tight timetables, tomorrow's discussion of the two bills in the House Finance Committee was postponed. They are scheduled to be discussed on the 27th of the month in the Committee, in the presence of technocrats of the Ministry of Finance, who will explain in detail the new additions made to the bills. The aim, according to a competent source, is to allay the concerns of the opposition party MPs on the issue of guarantors by revising the legislation, so that the bills can be forwarded as soon as possible to the Plenum of the House.
However, despite the revision of the bills, the government is looking for allies in Parliament, since, as the facts are now, the legislation does not get a majority. The 17 votes of the DISY MPs are taken for granted. On the other hand, AKEL (15 deputies) and DIKO (9 deputies), i.e. a total of 24 deputies, do not seem to consent to the adoption of the notorious bills. Moreover, ELAM (3 deputies), EDEK (4), DIPA (4) and Ecologists (3), with a total of 14 MPs, are waiting to see the provision for the protection of guarantors that will be included by the competent ministry in the bills, in order to make their final decisions. As things stand so far, in order for the bills to be approved, they will have to... pull back. Some parties that disagree, that is, will have to abstain. Otherwise,the country will go into vicissitudes and will not receive the cash from the EU.
He got into slavery and the President
In order to prevent unpleasant developments, which may endanger Cyprus' participation in the Recovery Fund, the President of the Republic has convened a week-long meeting with the party leaders, which will explain the necessity of implementing the milestones and commitments given by the Republic to the Commission during the conclusion of the agreement. Nicos Anastasiades, as "F" is informed, will ask for the cooperation of the parties, so that the country will receive by 2026 the amount of €1.2 billion from the Recovery Fund. In total, the country from 2021 to 2026 will have to implement 58 reforms and 75 investments. At the same time, President Anastasiades is expected to inform the party leaders about the progress of the implementation of the remaining prerequisites. If the two bills with the credit servicing companies manage to pass the stumbling block of the Parliament, then the Republic is expected to apply to the EU in the last week of July to get the €85m, that is, after a seven-month delay.
Scheduling goes back
According to the original plan, our country would disburse the money from the EU through 11 instalments. In July last year, the Republic was granted the first instalment, amounting to €156.8 million, by the Commission, which constituted 13% of the total amount and was not accompanied by prerequisites. The next instalments were scheduled to be paid every June and December, while payment requests will be submitted by the state every August and February. If the schedule were adhered to, then the country would now have received the second tranche, amounting to €85 million, while the third tranche (€85 million) was expected to be given in December 2022. The fourth instalment (€115 million) and the fifth tranche (€150 million) would initially be paid by June and December 2023 respectively. At the same time, in 2024 the country will receive in two instalments an amount of €245 million and in 2025 an amount of €225 million while Cyprus will receive an amount of €244.4 million in 2026. Due to the delay in the implementation of the first prerequisites, the planning that was made goes back and there is also a delay for the rest of the milestones. For example, by 30th Jun,e 18 objectives would have to be implemented, five of which will pass through the House. The application for the next tranche of €85 million was originally scheduled to be submitted in August, but due to the delay it will be submitted to the EU between October and November. This foreshadows long delays in the disbursement of the next tranches.
The next 18 milestones to be closed... end of June
It should be noted that of the 18 milestones to be achieved by the end of the month, very few have been implemented. Among the prerequisites of the third tranche are the creation of an electronic cloud computing platform to improve the trade and symmetry of information in the supply chain of fresh products, the introduction of a tax exemption for corporate investors investing in innovative enterprises, the approval of the bill for the implementation of strategic investments, the establishment of the Independent Anti-Corruption Authority and the strengthening of OCECPR.
It should be noted that these actions must be passed through Parliament. Some have already been approved, while the others are being discussed in the relevant parliamentary committees. The remaining 13 reforms that do not need to be regulated are the strengthening of administrative capacity and the improvement of the functioning of the public administration for better policy formulation and implementation by adopting the action plan for the management of human resources, the operation of VAT services within the integrated tax management system and the implementation of the information and communication technologies system of public health. In addition, the installation of thermal insulation and photovoltaic systems in 405 schools and the mass installation and operation of smart metering infrastructure by the distribution system operator are included.
The prerequisites are the implementation of measures for the protection of forests from fires, an integrated water management monitoring and control system, the creation of a national commercial identity and promotion of halloumi, the implementation of a plan to enhance the competitiveness of large enterprises active in the manufacturing sector, the promotion of the circular economy in hotel facilities and the operation of the central office for the transfer of knowledge. This includes the digital transformation of the central government and the improvement of the efficiency of the Department of Labour and the Public Employment Service and the empowerment of young people.
