THE CHAIRMAN of the House Watchdog Committee, Christos Pourgourides, on Thursday publicly called on all people who had taken out investment loans during the period of the big stock exchange bubble to stop making repayments, if they had not already paid them off. We would not have expected to have heard such grossly irresponsible advice from a legislator who has never been afraid to chastise his colleagues for indulging in populism. But his subversive call to people to renege on their contractual obligations, cannot be described as anything other than mindless populism.
What could have prompted Pourgourides to offer such truly bizarre advice that, if heeded, could cause major legal problems for people? From what we know he is completely sane and could not cite mental problems as justification for the opinion he expressed. In fact, he has tried to back it with a rational argument, which is based on the findings of the two experts employed by the legislature to investigate the bubble. According to the experts, many of the investment loans that were granted by banks and other credit companies back in 1999 Acould have been invalid@ because they were in violation of Central Bank directives.
To conclude from this that the loans taken out should not be repaid seems rather rash, but it did not stop the DISY deputy from doing so. Yet there are so many unanswered questions. For instance, when a bank exceeds its credit limits, it is fined by the Central Bank, but the loans it has given do not become invalid. If loans were given in violation of Central Bank directives, it does not make them null and void. The bank is usually fined, but the loans remain pretty valid.
The fact is that each investment loan would have to be examined separately, on its own merits, before it was established if it was invalid. Nobody could bunch all investment loans given at the time together and declare them invalid, as Pourgourides seems to think. Each individual case would have to go to court and the judge would have to decide if the loan is valid or not. Someone who heeded the deputy=s advice and stopped payment today would almost certainly be taken to court by the bank. If the court found that the loan agreement was valid, the investor would have to pay the legal costs as well as additional interest for delaying payment.
Logically, he should then sue Pourgourides and demand damages for lousy advice the deputy had given him. Being a lawyer, Pourgourides knows that he is not legally liable for the irresponsible advice he is giving as a politician. He also must know that most such cases would be thrown out of court, which suggests that he has a different agenda. It would appear that he wants people to stop re-paying their investment loans, en masse, in order to put public pressure on the banks and thus force them to reach settlements with their debtors.
If this is what he is trying to do, it is a very high-risk game that could very easily go wrong. Fortunately, on issues relating to the stock exchange, very few people, if any, trust the politicians, who have let them down consistently. It is highly unlikely that anyone will take Pourgourides absurd advice too seriously.
