The full bench of the Supreme Court on Thursday ruled unconstitutional seven bills which parliament passed in April last year and which the president promptly referred to the top court.
Opposition parties had especially insisted on passing two bills despite warnings at the time that they were probably unconstitutional.
One provided for offsetting loans with bank bonds, and one for the participation of bailed-in depositors on the lender’s board.
In its findings, the Supreme Court said that both these were in breach of the constitution and therefore null and void. The decisions were unanimous.
Opposition MPs had amended the ‘Resolution of Credit Institutions and Investment Firms Law’, adding to it an article stipulating that in the event of a bail-in, affected depositors acquired the right to a 20 per cent representation on the board of the affected bank.
Moreover, the article provided that this arrangement would be in force for a period of five years from the bail-in date, irrespective of whether the bank in question is in the meantime no longer under resolution.
The Supreme Court found that this violated the freedom of contract, and impinged on the right of shareholders unaffected by a bail-in to be proportionally represented on a bank’s board.
The other five bills, also found to be unconstitutional on Thursday, mandated certain state officials and civil servants to disclose their assets and source of funds. This included teachers, military personnel and police.
Acting on the attorney-general’s advice, the president had refused to sign off on a total of 16 bills passed by parliament last April and referred them to the Supreme Court.
To date, eight of these have been ruled unconstitutional, attorney-general Costas Clerides said.
“This shows that the criticism levelled against the president and the attorney-general at the time, that the referral of the bills was done due to political expediencies, is untrue,” Clerides added.
Asked about the remaining eight bills referred to the Supreme Court, the AG said rulings were expected soon.
The government camp had criticised opposition parties for pushing through ‘populist’ laws, in a vote-grabbing bid just before the previous parliament disbanded ahead of the legislative elections.
In turn, the opposition countered that several of the contentious bills were drafted by the government and submitted at the last moment, leaving MPs little time to review them properly.
