x

Economy

Cyprus Struggles to Ease Problem of Bad Loans

February 14, 2020

NICOSIA — Defaulted loans are a prime economic issue for Cyprus, which since a 2013 financial crisis has seen overdue payments weigh on consumers and banks. Yet a government scheme to ease the problem has not been embraced by borrowers as hoped.

Just over 5,600 applications to the ESTIA scheme were submitted by the Dec. 31 cut-off date, about half of what authorities had expected. Of those, only 1,200 applications were complete.

That accounts for 1.7 billion euros ($1.9 billion) in bad loans, compared with the 9.8 billion euros overall saddling the banking sector – almost a third of all loans.

The sum is still not insignificant for a country like Cyprus, which has the second highest private debt level in Europe.

The government came up with the relief scheme to deal with the toughest batch of the banks’ bad loan portfolio, loans collateralized with the debtor’s home.

Those seeking help are given the chance to save their homes – with an estimated value of 350,000 euros and under – from foreclosure.

The Cypriot finance ministry said the low number of applications was possibly owed to a perception that the government would come up with a “more generous” scheme down later, though officials have repeatedly denied they would.

Another reason is a reluctance by ‘strategic defaulters’ to disclose their financial information, like their income and assets both domestic and abroad so as not to enable banks to go after them.

Some banking and government officials said that the scheme had the upshot in weeding out debtors who are purposely shirking their obligations – so-called strategic defaulters – from those who really want government help.

“We will not, and should not, protect strategic defaulters, nor should we protect those who free ride on the plight of the undeserving to protect their lifestyle by living beyond their means,” Panicos Nicolaou, the chief executive of the country’s largest bank, Bank of Cyprus, told The Associated Press.

RELATED

NICOSIA — Israel and Cyprus said Monday that they have made “significant” headway in resolving a long-running dispute over an offshore natural gas deposit and say they are committed to quickly reaching a deal as Europe looks for new energy sources.

Top Stories

Columnists

A pregnant woman was driving in the HOV lane near Dallas.

General News

FALMOUTH, MA – The police in Falmouth have identified the victim in an accident involving a car plunging into the ocean on February 20, NBC10 Boston reported.

General News

NEW YORK – Meropi Kyriacou, the new Principal of The Cathedral School in Manhattan, was honored as The National Herald’s Educator of the Year.

Video

NYPD Οfficers, Βystander Save Man who Fell on Subway Tracks (Video)

NEW YORK — Two New York City police officers and a bystander raced to save a man who fell on the tracks at a Manhattan subway station, plucking him out of the way of an oncoming train in a daring rescue captured by an officer's body camera.

MONTREAL — Pedro Meraz says living in Colima, Mexico, was like living in a war zone, with shootings, burning cars and dismembered bodies being left outside of schools.

HONOLULU — As Hawaii's governor, David Ige faced a volcanic eruption that destroyed 700 homes, protests blocking construction of a cutting-edge multibillion-dollar telescope and a false alert about an incoming ballistic missile.

CAPE CANAVERAL, Fla. — NASA's Orion capsule entered an orbit stretching tens of thousands of miles around the moon Friday, as it neared the halfway mark of its test flight.

LONDON - A traditional song titled ‘Μια μάνα απόψε μάλωνε - A mother tonight was scolding’ was heard in the streets of London! In other words… a singer of traditional Greek songs, Gogo Moustoyannis, noted in a post on her Facebook page that she felt the need to sing a song while walking in London.

Enter your email address to subscribe

Provide your email address to subscribe. For e.g. abc@xyz.com

You may unsubscribe at any time using the link in our newsletter.