EU warns Cyprus new legislation softening foreclosures law clashes with rescue deal's terms
{{#rendered}} {{/rendered}}The European Union is warning Cyprus that it may be flouting the terms of its multibillion-euro rescue package after the country's parliament approved legislation softening a crucial foreclosures law.
Though legislators have approved a law that significantly cuts the time banks need to seize and sell off property in order to tackle a huge number of bad loans, they backed several other measures that give additional cover to borrowers, including writing off the outstanding amount of a loan once property is foreclosed on.
Simon O'Connor, a spokesman at the European Commission, said Wednesday that some of those laws "aren't compatible" with the bailout's terms.
{{#rendered}} {{/rendered}}He said euro area members will hear how Cypriot officials plan to deal with this at a meeting this Friday of the currency zone's finance ministers.