Filenews 13 December 2024 - by Eleftheria Paizanou
The parties, the banks and the government played everything out yesterday to bring the majority of MPs to their side during the vote on whether or not to impose the extraordinary 5% levy on the excess profits recorded by credit institutions due to the rise in lending rates and the interest on their deposits with the ECB.
AKEL made a hard effort to persuade MPs from other parties to support its proposal, while the other parties – except ELAM and the Greens who voted in favour – fought to win more promises from the banks for future measures in favour of borrowers.
The Government, the Association of Banks and even the Central Bank, through various moves, made efforts to prevent the adoption of the draft law. As is known, since Wednesday the Ministry of Finance has mobilized the Interest Subsidy Scheme to change the mood in favour of voting against the proposal, while some banks rushed to last-minute announcements for interest rate cuts.
The balances
Finally, after a long debate in the Plenary of the Parliament, amid a tense atmosphere, with accusations, recriminations, confrontation and behind-the-scenes deliberations, AKEL's proposal for a law, which would have imposed an extraordinary solidarity fee of 5% on banks' superprofits for 2024 and 2025, was rejected.
The bill was voted down by 25 MPs from DISY, DIKO, DIPA and Alexandra Attalidou. The bill was supported by 25 MPs from AKEL, ELAM, EDEK, Ecologists, DIKO MP Zacharias Koulias and independent MP Kostis Efstathiou.
In case of a tie in Parliament, the proposed legislation is rejected, as there are no more votes in favour. DIKO MPs Pavlos Mylonas and Christos Orphanides, MP Michalis Giakoumis and independent Andreas Themistocleous abstained. In fact, the abstention of the four Members determined the outcome.
Done the "save"
DIKO and DIPA MPs who differed from the official stance taken by their parties wavered until the very end. The intention to differentiate them had provoked a strong reaction from the leaderships of the two parties.
In the end, Mylonas, Orphanides and Giakoumis had second thoughts and chose the path of abstention, which led to a vote against the imposition of the solidarity fee. Due to the tied result, AKEL asked for the vote to be repeated by hand, a request that was not accepted.
Raging background
Behind-the-scenes consultations began on Wednesday evening, with bankers in an open line of communication with the parties. Yesterday morning, the Association of Greek Banks issued a statement committing to an immediate examination and specific measures in favour of borrowers. The banks' move was aimed at postponing the discussion of the draft law until January, something requested by some parties, and at a meeting of party leaders or representatives.
It was reported that the postponement would give banks time to work out new plans for borrowers, especially young people.
Just when it seemed that the discussion of the issue would be postponed, something that ELAM requested in plenary, it was finally decided by vote to discuss the proposal.
They remembered '13 and Co-op
Before the vote, the parties exchanged accusations and remembered the collapse of the Cypriot economy in 2013, the haircut on deposits, the Cooperative, etc.
AKEL Secretary General Stefanos Stefanou said that AKEL is not allergic to profits but to stealing. As he said, the 5% fee will be imposed on superprofits, pointing out that in 2022 and 2023 due to the increase in interest rates they had a 100% increase. He said that AKEL is with society, pointing out that 4 EU countries apply a tax on banks' superprofits.
On behalf of DISY, MP Onoufrios Koula wondered what will happen when banks have overlosses. He said that if the proposal were passed, banks would pass on taxes to borrowers. DIKO President Nicholas Papadoulos expressed pessimism that the country will not get back on its feet because, as he said, some do not learn and play political games, leading Cyprus to the rocks.
