Creditors urge Cyprus to put foreclosure laws in gear

AP News
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Posted: Feb 06, 2015 11:06 AM

NICOSIA, Cyprus (AP) — International creditors urged Cypriot authorities to keep their word and push through crucial foreclosure laws as Cyprus' finance minister insisted that the rescue program is bringing the country back to financial health.

Officials from the European Commission, the European Central Bank and the International Monetary Fund said in a statement Friday that they couldn't complete the latest review of Cyprus' financial rescue deal because the foreclosure laws, aimed at helping ailing banks collect on a huge number of sour loans, haven't been implemented yet.

Cyprus has won plaudits over five previous reviews for its adherence to the terms of the 10 billion-euro ($1.14 billion) bailout it got nearly two years ago, that saved the country from bankruptcy but crushed its banking sector.

Lawmakers have delayed implementation of foreclosure legislation until March and want to have insolvency laws in place to protect small debtors from losing their homes.

The Cypriot government has criticized the delay, saying it only serves to erode the country's credibility since banks can't proceed with foreclosures before insolvency laws are enacted.

Unlike the new Greek government's push to overhaul its own rescue, Finance Minister Harris Georgiades said the Cypriot economy is getting back on its feet because authorities are sticking to the bailout's terms.

"The implementation of the program isn't leading our country into even deeper recession but quite the opposite," Georgiades said in a statement Friday. "Our economy is gradually rebounding."

The European Commission on Thursday reaffirmed earlier projections that the Cypriot economy will emerge from a three-year recession and grow by 0.4 percent in 2015.