THE LAST time the opposition parties forged a resistance front to protect the interests of the Cypriot people from the neo-liberal proposals of the Eurogroup it resulted in the closing down of the second largest bank and the bail-in of shareholders, bondholders and depositors of the biggest bank. It also pushed the economy deeper into recession, the effects of which will be felt for a long time to come.
At the time – March 2013 – to justify their mindlessly irresponsible decision of rejecting the one-off levy on bank deposits, deputies claimed that we would find funding for our bankrupt state and collapsing banks from alternative sources. Moscow would bail us out, it was claimed while others argued that the money could be raised from selling plots of our Exclusive Economic Zone; AKEL’s deputies had supported the idea of leaving the Eurozone and bringing back the Cyprus pound. None of their promises materialised and a much worse bailout regime was imposed on us.
We have been witnessing a similar scenario in the last few weeks, with the opposition parties forging a resistance front against the foreclosures law, the implementation of which is a condition for the release of the next tranche of financial assistance from our lenders. The contentious bill was finally approved eight days ago, but the parties also approved a host of other bills that would supposedly provide a ‘safety net’ for ‘vulnerable groups’.
In effect, four of the supplementary bills, which were referred to the Supreme Court by the president for a ruling on their constitutionality, would prevent the foreclosures law being implemented. One allows borrowers with non-performing loans of up to €350,000 to apply for court-ordered protection while another gives the right to a borrower not to repay the part of the loan not covered by the sale of collateral. And in case there were any doubts that the parties were taking the lenders for a ride, another law passed last weekend would prevent foreclosures until the insolvency legislation was ready at the end of the year.
All these supposed ‘safety net’ measures were passed despite the lenders having made it clear they would not accept them. After their approval last weekend, deputies from all parties were rejoicing that they had scored a big triumph, waxing lyrical about what could be achieved through political unity. The Troika brought everyone back to earth on Monday evening signalling its disapproval of the laws that would make the foreclosures law a dead letter.
The Eurogroup would not discuss the release of the money at its meeting that was scheduled for last Friday. Friday’s meeting kept the door open, the president of the Eurogroup Jeroen Dijsselbloem saying that “once the troika institutions confirm required prior action has been successfully completed we can proceed with the disbursement of the next tranche.” This would require the Supreme Court to have ruled the four laws of the parties, which the lenders disapprove of, unconstitutional and the parties acting responsibly.
Unfortunately the opposition parties have given no indication that they would put aside the cheap and mindless populism they have been engaging in for the last month. On the contrary, AKEL in retaliation to the referral of the laws to the Supreme Court had threatened to pass an act of parliament suspending the foreclosure law. The other parties are also digging in their heels, accusing the president of obediently serving the Troika instead of the interests of the Cypriot people.
None of them however, has informed the public how they would deal with the crisis that would be created if the tranche of €500 million was not released. DIKO chief Nicholas Papadopoulos, who heads the resistance campaign, declared that the consequences of having a foreclosures law without safety measures would be much worse than the consequences of not receiving the money. We would rather believe Professor Christoforos Pissarides, a Nobel prize winner for economics, who warned there could be another haircut of deposits if there was no foreclosures law in place. He is a renowned economist and has no personal agenda that he places above the interests of the country as Papadopoulos, a lawyer, has done.
The poor judgment and populist negativity of the parties caused the country much bigger harm than was necessary in March last year. They must not be allowed to do the same now because the consequences would be even more catastrophic. President Anastasiades’ repeated attempts to bring them on side failed because they were seen as a sign of weakness. Now, he must stand up to the parties, by appealing directly to the people and spelling out the devastation that would be caused if the parties do not back down.
The parties might think twice if they are made to take the responsibility for the national catastrophe their foolish actions would trigger.
