St Maarten and Curacao to get liquidity support, Knops to Second Chamber

 The HAGUE:--- On Wednesday, during the Legislative Consultation on the Amendment of the Budgetary Statement of Kingdom Relations (IV) for 2020, you discussed the incidental supplementary budget for liquidity support in Aruba, Curaçao and Sint Maarten (TK-
35443) expressed your support for the line that the government has deployed in the financial support of the Caribbean countries in the Kingdom. During that debate, it was known that Aruba had approved the Netherlands' proposal for additional liquidity support for the country for the period 15 May to 30 June 2020 to the country including the associated conditions. The Governments of Curaçao and of Sint Maarten have confirmed in writing at my request after the debate that their letters received by me during the debate should be read as an unconditional agreement with the proposal contained in the RMR of 15 May 2020. This means that a second tranche of liquidity support will be provided to Curaçao and Sint Maarten.

Curacao Curaçao will receive an interest-free loan totaling ANG 204 million (€ 104.7 million) for the period May 15 to June 30, 2020. Just as for Aruba, the amount required for the implementation of the wage subsidy scheme (ANG 63 million) will only be made available if Curaçao has adequately implemented a personal contribution from employees within this scheme. The other ANG 141 million will be made available to Curaçao immediately. Furthermore, a number of conditions that apply to the financial sector apply specifically to Curaçao. Curaçao and the Central Bank of Curaçao and Sint Maarten (CBCS) must provide De Nederlandsche Bank (DNB) with insight into the situation in the financial sector in general. Curaçao is requested to provide insight into potential losses and where they will fall, to provide information about the intended solutions for tackling problem institutions and to allow the CBCS board to consist of at least three directors who are all subject to the highest 'fit' & clean 'standards. The appointment will be made in consultation with DNB. St Martin Sint Maarten will receive an interest-free loan totaling ANG 53 million (€ 27.2 million) for the period May 15 to June 30, 2020. ANG 24 million will be made available to Sint Maarten immediately. The other ANG 29 million relating to the wage subsidy scheme will be made available after Sint Maarten has adequately implemented the requested personal contribution from employees. Sint Maarten must also make adjustments to the graduated scale for the wage subsidy scheme, because the scheme in the form proposed by Sint Maarten leads to unequal treatment of companies. Sint Maarten has previously been requested to also cover the proposed aid package within its own budget. However, the government of Sint Maarten has not yet implemented this. Therefore, the RMR has repeated this request. Plans for savings must be submitted to the Cft by 22 May 2020.

Furthermore, the RMR has requested Sint Maarten to increase the retirement age (AOV age) from 62 to 65 years of age (for persons born after 1959) on 1 July. While Aruba and Curaçao have taken steps to raise the retirement age to 65 years ago and in the Netherlands this age is even higher, Sint Maarten is lagging behind. A bill for raising the retirement age has been before the States of Sint Maarten for several years, but has not yet been approved. Now that savings are needed, this really needs to change. Generic conditions with regard to the employment conditions Like both Aruba, conditions have been set for both countries with regard to a reduction of the employment conditions package in the (semi) public sector. This was decided because of the high budgetary pressure on the personnel costs of the public and semi-public sector of the countries and in the context of solidarity with employees outside the (semi) public sector. Specifically, this concerns a reduction until further notice of 25% on the total package of terms and conditions of employment of States members and Ministers, and a reduction of 12.5% of the total benefits package of all employees in the (semi) public sector. Of course, the minimum monthly wage applies as a lower limit for the gross monthly salary. Curaçao and Sint Maarten must also reduce the employment conditions of top officials in the (semi) public sector to a maximum of 130% of the new standardized salary of the Prime Minister of the country concerned. In principle, this measure also applies to existing employment contracts and has an equal effect on the rates for consultants. Follow-up process and additional support The proposed support enables Curaçao and / or Sint Maarten to continue until the end of June Continue to function by 2020. In early July, the RMR speaks of liquidity support for the period from July. Then it will also be checked whether the conditions now set are met. The outcome will be included in the decision-making on further aid.
Supplementary loans will not be given directly to the government from July but will go through an entity that is yet to be established. In this way, the Netherlands can focus on results. After all, as I announced earlier, these loans will be made dependent on a package of measures aimed at structural reforms. Agreements will also be made about this in early July. These agreements will be discussed with countries willing to do so in the near future, with the C (A) ft continuing to play an important role. The conversation in the coming period is not without obligation. Further support is contingent on concrete commitments and achievements on structural reforms that enhance countries' resilience and earning potential, for both current and future generations. This approach was explained on 12 May by Prime Minister Rutte in consultation with the Prime Ministers of Aruba, Curaçao, and Sint Maarten and discussed with your House on 20 May.

The budgetary consequences of the second tranche of liquidity support are presented to you in a supplementary budget law. Normally, new policies are put into effect after the States-General has authorized the fiscal law. Since the postponement of the implementation of this urgent measure that is in the interest of the State cannot wait for formal authorization by both Houses of the States-General, the Cabinet will implement the
start measure. This acts in accordance with paragraph 2 of Article 2.27 of the Government Accounts Act 2016.

 The Secretary of State for the Interior and Kingdom Relations,
drs. R.W. Knops.


Click here to read the official letter sent to the Second Chamber by Raymond Knops.