In the context of efforts to protect small and medium-sized enterprises from unfair clauses and the risk of divestment, AKEL MEP G. Georgiou, met with Commissioner P. Ioannou in Brussels, where they had the opportunity to discuss the way forward, following the referral of the relevant legislation voted by the Cyprus Parliament from the Government.
During the discussion, Mr Ioannou stressed that when a clause is abusive for a consumer - natural person, it can only be abusive for a natural person doing business for a living, as well as for a small family business where the shareholders - livelihood providers are part of the staff. He pointed out that the extension of the law on unfair clauses to the case of SMEs and micro-enterprises has become necessary as credit institutions have a special economic power in relation to debtors, and it is therefore necessary to take measures to restore the balance between the rights of debtors and creditors.
Georgiou stressed that the exclusion of small and medium-sized enterprises leads to unequal treatment, as cases where the contract was made in the name of a very small enterprise and not in the name of a natural person are not covered by the law. He stressed that for AKEL, the protection of small and medium-sized enterprises is a priority. He then recalled that when he raised the issue before the Commission, asking for measures to protect small and medium-sized enterprises in Cyprus, Commissioner Reynders replied, on behalf of the European Commission, that although contracts concluded between parties acting for purposes connected with their professional activity did not fall within the scope of Directive 93/13/EEC on unfair terms, Member States were nevertheless free to decide to extend the scope of national rules on unfair terms to cover contracts concluded between small and medium-sized enterprises in Cyprus.
