Cyprus delays key foreclosure vote as protests turn violent

The Cypriot parliament delayed voting Friday on controversial foreclosure legislation demanded by international lenders after protesters scuffled with police outside parliament.

Amid tight security, around 250 protesters had gathered to shout down the bill, chanting "No homes in the hands of bankers" and "Stop the country being sold off".

As tempers flared and protesters tried to break through barriers, there were scuffles with the police. No arrests or injuries were reported.

A replica coffin was held bearing the words "Will you vote yes?"

After a four-hour delay, as MPs squabbled behind the scenes, it was decided that a new attempt to vote would be held at midday Saturday.

When the 56-member House of Representatives reconvenes the vote is expected to be a cliff-hanger.

Ruling party DISY is in a minority, and with the backing of smaller opposition party DIKO it has only 28 votes.

The main opposition party communists AKEL are expected to vote no, along with several fringe parties. The balance will depend on socialists EDEK.

The International Monetary Fund has already held back 86 million euros ($93 million) in bailout funds after parliament previously delayed a vote.

That money is part of a 10-billion euro package of emergency loans Cyprus was forced to negotiate to avoid bankruptcy in March 2013.
The troika of lenders -- the European Central Bank, European Commission and IMF – has suspended its fifth review of the economy after Nicosia was deemed to be sidetracking from the harsh austerity programme it had agreed to.

Conservative President Nicos Anastasiades, who leads a minority government, had urged MPs to show responsibility in helping the eurozone member receive rescue aid.

Local media reported Friday that the central bank warned MPs that if the legislation is not approved, banks may need to raise fresh capital and undergo stress tests.

Without the foreclosure legislation in place banks are not eligible to participate in the ECB's 1.1 trillion-euro quantitative easing programme.

The deeply controversial bill cuts the legal process for foreclosing on mortgages from years to months.

Fearing people could lose their homes, opposition MPs demanded protection mechanisms for primary residences and third parties who guaranteed mortgages, and to ensure more small businesses would not go under.

The lenders said the legislation is essential if Cyprus banks are to tackle a mountain of bad debt.