26.10.2022
Treasury Secretary Konstantinos Petrides on Wednesday said it was now up to the House of Representatives to decide whether to suspend enforcement, however, warning that amid rising rates, there is a risk that the measure could turn from temporary to permanent and eventually rescinded. collection bill in full.
Petrides was asked to comment on Brussels’ recent comments , indicating that they are monitoring developments on the matter and the possibility that this will affect the payment of the first installment of 85 million euros through the European Recovery and Resilience Fund (RRF).
The Minister of Finance said that both the Ministry of Finance and the Central Bank of Cyprus (CBC) warned of the consequences, before noting that “the consequences are not only the risk of not paying the next tranche, which is very important in the period we are going through, as we cannot afford to leave any funds unused.”
“But there is also perhaps an even greater risk that the state of affairs associated with an interim measure may tend to be permanent, with the risk of weakening or even abolishing the collection system,” the minister added. Moreover, Petrides explained that “if this happens, we will definitely be punished with a rating downgrade.” He also stressed that it is very important for Cyprus to maintain a framework for foreclosure, especially in a time of heightened uncertainty.
The finance minister went on to say that amid rising government bond yields, Cyprus could not risk a possible downgrade, especially after the country’s credit rating was restored with “pain and hard work”.
“And stay away from the markets at a time like this, who exactly will be rewarded at the end of the day?” Petrides asked. “Defaulters and people who don’t pay their dues, which in turn will make all the people who paid and repaid their loans think that the political establishment will find a way to fix everything if they don’t not pay, without punishment, perhaps with many other extensions,” he added.
Meanwhile, Petrides also recalled that the Estia housing plan and the Ikia home plan have already been implemented, and a mortgage rent plan is also under consideration. He also added that while there is an informal agreement with the banking sector that no sales will be made for borrowers covered by this plan.
“Therefore, I see no point in a new prolongation with all these serious risks for the economy that we previously noted,” the minister said. “I think we have repeatedly expressed our concerns to the House of Representatives, but the case is on their side,” concluded Petrides.
