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Update: House approves Hellenic Bank guarantees, tougher framework for NPLs

July 8, 2018 at 8:34pm
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The House of Representatives on Sunday approved state guarantees for Hellenic Bank, opening the way for the implementation of  the bank’s agreement to acquire the good part of the Cyprus Co-operative Bank.

The guarantees were approved by 32 votes in favour to 20 against after a marathon debate at the end of week-long consultations in the House Finance Committee. Thirty MPs from DISY, DIKO, EDEK and ELAM  voted in favour. Twenty MPs from AKEL,  Solidarity, Citizens Alliance, the Greens  and independent MP Anna Theologou voted against.

The House also approved a number of government bills to tighten up the insolvency framework,  particularly the fight against NPLs, in line with an undertaking made to the European Commission.  These were approved with the combined votes of DISY and DIKO. Amendments submitted by Opposition parties were rejected.

A majority also gave approval to bills governing the next day at the co-op once the agreement with Hellenic goes through.

The vote on state guarantees came after an acrimonious debate with the government coming under intense criticism, even from the Opposition parties that voted in favour, over its handling of the state-owned co-op.

They said they were voting with a heavy heart because it was the only way to protect the co-op’s depositors. They also criticised the agreement with Hellenic Bank as a sell-out of the co-op.

DISY president Averoff Neophytou spoke of an ‘act of responsibility’ to save the more than 600,000 depositors of the co-op, 90% of whom are small depositors. “Of course the first €100,000 is guaranteed. Is there anyone in this plenary who knows that we have €8.5 b in cash to give to depositors? We do not have a penny. We would have to go to a new memorandum to give to depositors,” he said.