The Democratic Rally (Disy) suggested a series of measures to support lenders in a meeting with the Association of Cyprus Banks.
A party delegation, led by president Annita Demetriou met with the Association on Thursday.
Disy, Demetriou stated, supports the “targeted reduction of interest rates for housing loans and small businesses, an increase in deposit interest rates, and proactive restructurings for reliable and responsible borrowers.”
In statements following the meeting, Demetriou initially noted that during these challenging economic times, influenced by international circumstances and the precision of ongoing interest rate hikes, banks should contribute more.
“We believe, based on the data we have studied, that banks have the ability and the obligation to support the economy through targeted measures, offering relief, especially to reliable borrowers. These measures should not derail the economy and should directly benefit both depositors and borrowers. We should certainly avoid populist and misguided propositions that would not only fail to benefit the citizens but could likely yield precisely the opposite result,” she said.
Disy advocates for the reduction of lending interest rates with a specific focus on housing loans and loans for small businesses, an increase in deposit interest rates, proactive restructurings for reliable and responsible borrowers, and a reduction in customer charges.
She highlighted that the party has submitted a legislative proposal to reduce the tax paid by depositors on earned interest from 30% to 17%. “Through tangible steps, with responsible and serious propositions, we can support both borrowers and depositors, as well as our entire economy,” she stated.
When asked whether these proposals should be drafted into law, Demetriou said that this isn’t necessary, but added that where legislative intervention is needed, Disy is prepared to act.
She stressed the importance of cooperation from the banking institutions themselves and noted that this was the reason for today’s initiative to meet with the Banking Association. “We need to discuss these matters, understand exactly what we have to manage, and proceed with feasible policies. Our aim is to avoid policies that would destabilise the economy and shift the cost onto borrowers and Cypriot citizens,” she explained.
She reiterated that Disy’s goal, through targeted and feasible measures, is to provide support specifically to responsible borrowers.
Regarding the willingness of banks to collaborate following today’s meeting, Demetriou stated that this would be determined based on forthcoming announcements.
She also expressed hope that the banks would promptly and comprehensively respond, particularly now that citizens are already facing numerous challenges.
Banks must respond by taking concrete initiatives that support both the system and the borrowers and depositors themselves, she stated. “We will await their response,” Demetriou concluded.
The government is facing growing pressure to urge banks to lower their interest rates for lending, which have skyrocketed, squeezing consumers’ pockets further and raising concerns that a new toxic loan crisis could be imminent.
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