Cyprus’ Finance Ministry is scrambling for ways to push forward two foreclosure bills which have come to an awkward impasse after opposition parties blamed the administration for not doing enough to persuade the European Commission to approve an amendment to protect bad loan guarantors.
Four opposition parties that sponsored the amendment aimed at protecting loan guarantors reportedly heard back from the Finance Ministry this week that Brussels had rejected their amendment proposal as “harmful.”
The amendment would block credit management companies from accessing guarantors’ personal information to resolve defaulted loans. But the proposal has been holding up the approval of two crucial government-sponsored foreclosure bills that were required to fulfill Cyprus’ promises to the Commission by a December 2021 deadline. The country also risks losing 85 million euros from the Recovery Fund as the money has been linked to the reforms, according to government officials.
European Union officials argue that the proposal, which would block access to the personal information of loan guarantors, would hinder companies trying to tackle and resolve bad loans.