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Insolvency framework remains stagnant

03/03/2015 07:14
The cabinet will not discuss the fifth bill of the insolvency framework today, causing further delay to the restart of Cyprus funding program.

It seems that the relevant provisions of the legislation about the obligations of the guarantors towards the principal debtors and the value for the protection of the primary residence, continue to be a point of disagreement between the Ministry of Finance and the international creditors.

During the last days there were signs that differences with creditors, particularly in respect to the obligations of the guarantors, were overcome , while the Finance Minister was optimistic at the Finance Committee of the House, that the fifth bill would be presented to the next cabinet meeting.

Government spokesman Nikos Christodoulides, told StockWatch, that the fifth piece of legislation is not up for discussion in the agenda of today's meeting of the cabinet.

The adjustment program of Cyprus remains in impasse and the financing program has been disturbed since last September, both from troika sources, and from the markets.

Cyprus has to refinance debt of €2,9 bn in 2015.

The promotion of insolvency bills is a prerequisite for the parties to implement the law of foreclosures.

The plenary session of parliament decided by a majority last Thursday to suspend once again the implementation of the Law on foreclosures until March 19, awaiting for the complete insolvency framework.

Messages from Brussels

However, Brussels has sent clear messages to Nicosia through international creditors, to stick to the course of implementing the loan agreement, regardless of the problem that exists with the law on foreclosures.

They pointed out that we should avoid Athens type "tactics", which would lead the economic program of Cyprus to a rough area.

Greece is an example to be avoided in this case, according to international creditors.