NICOSIA, July 13 (Xinhua) -- Cypriot Finance Minister Harris Georgiades said on Saturday that he will strongly oppose laws passed by parliament, which aims at the suspension of mortgage foreclosures until a plan aimed at protecting small scale loan owners comes into operation.
"I'll suggest to the President not to sign the laws but to send back to parliament, hoping that the House will re-considers its decisions in a responsible and composed manner," Georgiades said in a tweet. The president will most likely follow his advice.
He added that the decisions made by parliament may be liked by a section of public opinion, but they are likely to undermine public interest and the economy.
Banks also had expressed concern over the provisions of the new legislation, which will prevent them from repossessing mortgaged properties, saying that international rating agencies may devalue their creditworthiness, as they will need to make more provisions for non-performing loans.
Financial Ombudsman Pavlos Ioannou told state radio that he was opposed to the laws blocking repossession, saying that he had urged parliament in a 12-page document to refrain from voting the legislation, as it will encourage strategic defaulters to refrain from repaying their loans and will hurt the economy.
The new legislation regulating foreclosures and insolvency were proposed by opposition parties which command a majority of votes in parliament.
Parliament's president had suggested a postponement of the discussion and voting on the proposed laws, but they were passed on Friday night by a majority of opposition votes at a marathon parliamentary session which was the last before summer holidays.
The application of the provisions of the legislation would negate provisions of laws passed last year at the behest of international lenders, which had urged Cyprus to facilitate the reduction of non-performing loans by giving leeway to the banks to move against defaulters.
International rating agencies said that last year's legislation was one of the reasons they raised Cyprus's ratings to investment grade, reducing the cost of borrowing.
Non-performing loans is the most serious problem with which the Cypriot banks and the economy are facing in the aftermath of the eastern Mediterranean island's 10 billion bailout by the Eurogroup and the International Monetary Fund in 2013.
Non-performing loans have been brought down to about 8 billion euros, or 28 per cent of the total, from a peak of 48 billion, but they are still a big burden on the banking system as it struggling to stabilize itself.
