The Netherlands offers the countries of Corsica, Sint Maarten and Aruba to refinance the loans they received to cope with the consequences of the corona pandemic. These loans, totalling €1.17 billion, expire on 10 October 2023. If the countries accepted the Dutch proposal, they would have the possibility to distribute the payment over a longer period, at the current interest rate.
This requires that states continue to pay essential services to their citizens. Minister Van Huffelen sends a letter to the Second and First Chambers. At the end of last year, the Council of Ministers took into account that due to the amount of benefits and to recover the public finances, the countries would not be able to pay them in full on the final date.
For this reason the Dutch government decided at the beginning of this year to offer the countries the full refinancing. Refinancing conditions To benefit from the favorable refinancing and low interest rates, countries must meet a number of conditions.
All countries were asked to indicate how they would like to strengthen their economies further in the coming years. Among other things, by elaborating a Multiannual Economic Framework that should provide a vision of planned investment and reform. The Netherlands also calls for an independent calculation of the refinancing, in order to determine the country’s debt burden. Sint Maarten was the first country to complete the transfer of the refinancing.
This indicates that public funding will remain vulnerable in the years to come. For this reason, the loan is offered free of charge and Sint Maarten gets the possibility to repay the loan at a more uniform rate. Financial supervision agreement in a Kingdom Law In addition to these general conditions, there are a number of country-specific conditions. So in Aruba they need to be in accordance with a Kingdom Law, in which the financial supervision is regulated permanently. As there is no administrative agreement with Aruba on a Kingdom Law, Aruba receives the loan at a higher interest rate (6 – 8%).
This corresponds to the interest that the Netherlands would have charged to countries with a similar credit rating. In addition, Aruba has not yet submitted a transfer of the refinancing. If Aruba does in any way comply with a Kingdom law, they will also be eligible for a lower interest rate of approximately 3.1%. If they also provide a transfer, the entity can agree on the structure of the trust and the payment. Ennia problematiek Curaçao en Sint Maarten For Curaçao and Sint Maarten there should be an administrative agreement on a financially realistic rescue plan for the pension insurance company Ennia.
This pension insurer is facing a huge capital deficit, which threatens a discount for 30,000 police salaries in Curaçao and Sint Maarten. The collapse of this insurer will have great socioeconomic consequences for the inhabitants of these countries. For this reason the Netherlands is willing to grant a guarantee to these two countries to make a resumption possible and thus offer security to the insured of Curaçao and Sint Maarten.