PHILIPSBURG:--- The Dutch government has announced its decision to refinance loans granted to Curaçao and St Maarten partially. These loans, originally issued in 2010 as part of a debt restructuring agreement during the constitutional reform of the Kingdom of the Netherlands, were due for repayment. However, the refinancing decision was made to support the financial stability of these territories.
Background of the Loans
- Curaçao: Loan amount of XCG 139.7 million (approximately €69.9 million).
- Sint Maarten: Loan amount of XCG 73.5 million (approximately €36.8 million).
- Combined, the loans total over €106 million, which was initially expected as revenue in the 2025 budget for Kingdom Relations.
Reason for Refinancing
The decision to refinance was influenced by advice from the College of Financial Supervision (Cft). The Cft highlighted that full repayment of the loans would significantly weaken the liquidity positions of Curaçao and Sint Maarten, potentially falling below the levels recommended by the International Monetary Fund (IMF). This could jeopardize the continuity of public services in these territories.
- Curaçao: The country is in a position to repay part of its loan.
- Sint Maarten: Due to its fragile financial situation, repayment is currently not feasible.
The financial challenges faced by both territories are attributed to the aftermath of the COVID-19 pandemic and long-term financial obligations, including issues related to the pension insurer Ennia.
Impact on the Dutch Budget
The refinancing will reduce the projected revenues for the Kingdom Relations budget in 2025. Specifically:
- Revenues for Article 5 (Debt Restructuring/Loans) will decrease from €205.3 million to €98.7 million.
- The repayment of these loans will now be deferred to future years, though these amounts have not yet been incorporated into the budget.
Conclusion
This refinancing decision underscores the Dutch government's commitment to supporting the financial stability of Curaçao and Sint Maarten, ensuring the continuity of public services and addressing the economic challenges faced by these territories.