During the last meeting in the Parliament, Prime Minister Evelyn Wever-Croes gave an overview of where the negotiations with the Netherlands are at present. The prime minister explained that the Government presented in the Netherlands a main line agreement which is the first concept regarding the hybrid solution. Secretary of State Alexandra van Huffelen agreed to continue talking and go in this direction, and indicated that if Aruba and the Netherlands reached each other before the end of the year, she is willing to reduce the interest rate to 5.1% for a maximum of 2 years, which is the time it takes to draw up a Kingdom’s Law. If by the end of the year, you manage to have a Kingdom’s Law on the table, the interest will lower even more.
The Prime Minister indicated that it is very important for the Netherlands that financial standards are part of the Kingdom’s Law, and for the Parliament of Aruba it is important that these standards are in the country ordinance. Aruba knows 3 standards, which are the surplus standard of 1%, staff expenses standard which is 10% of the GDP, and the debt standard which must reach 70% by the year 2031. This is where you have to negotiate which standard will be accepted and which not. Another important point for the Netherlands, brought forward by Secretary Alexandra van Huffelen is that Aruba must bring changes in the LAft law before the end of the year, given that the existing laws date back to 2015, under the previous government.
Currently the new standards are not anchored in the law but in a protocol, and there is agreed that will modify it in the law. It is important to emphasize that the law of LAft cannot be changed only by Aruba. The Government had already worked on the changes, but before going to the Parliament you have to apply for the Netherlands’ authority and permission. Once the government finds the answers that the changes are good, then we will be able to continue. This is the most recent negotiations status. The Prime Minister indicated that if Plan A, which is the hybrid solution, is not achieved, he will continue with Plan B, which is based on the possibility that the other debts that are going to mature, and that have high interest rates, can be refinanced at a lower interest rate. Important is that whatever the outcome, the interest costs, Aruba can pay them. The economic development of Aruba is going towards a positive direction as tax revenues are already higher than expected. Also the tax department is doing more work on compliance, thus charging the large instances that did not pay taxes.
With this money, part of the interest can be covered if an agreement is not reached with the Netherlands. The interest, if an agreement is not reached by the end of the year, will be at 6.25%, and if an agreement is reached it will be at 5.1%, which adds up to a difference of 1 million guilders. This sum will be handled by Aruba, which gives space to continue negotiating in order to reach an agreement on the welfare of Aruba. Therefore I want everyone to stay calm. We are trying to reach a balance, it is true that 1 million is a lot of money, but not enough to sacrifice an instrument that worked for years, which is the key to the development of your country. If we give it to Holland for the 1 million, we will pay in the end much more. If we pass financial supervision into the hands of the Netherlands, as Curacao and Sint Maarten did, all economic development is at risk, and this will lead to more risks for Aruba in the future. So let’s go, calm down, and trust in our men. Aruba has the strength because our people have always shown themselves to be capable of carrying responsibility. Aruba always came forward, despite what happened. I am very confident that we will reach the best solution for Aruba and the community in general, said the Prime Minister.
