The new government of Aruba has promised to send all final comments on the draft Consensus Kingdom Act for Financial Supervision (see related story) to The Hague by May 1. Per that date the Netherlands will increase the interest rate on Aruba’s COVID-19 crisis loans from 5.1 to 6.9%.
An increase of 1.8% is significant, considering the total amount of 900 million Aruban florins. Only when the law takes effect in the future will the interest be reduced to a market-based rate plus a premium, currently 3.1% as applied to the other two Dutch Caribbean countries.
Dutch State Secretary for Kingdom Relations Zsolt Szabó is enforcing an administrative accord between his predecessor Alexandra van Huffelen and former Aruba Prime Minister Evelyn Wever-Croes. It included a May 1 deadline for submitting a joint bill to both Parliaments.
The recently-installed Eman III Cabinet now has to deal with this. Finance Minister Geoffrey Wever said the incoming AVP/Futuro coalition, which took office four weeks ago, immediately instructed its negotiation team to ensure that all required documents are delivered to the Netherlands on time.
They hoped the Netherlands would reconsider especially given that Szabó has emphasised Aruba’s path toward financial self-reliance. In addition, one reason for the delay is that in agreement with the Netherlands a request was submitted to the International Monetary Fund (IMF) to provide an independent assessment of the proposed financial supervision norms, but the report is taking longer than anticipated.
Perhaps the Kingdom Council of Ministers can still be persuaded to keep the present 5.1% interest while the process to prepare and introduce the kingdom law is accelerated. That would still leave the market-based (now 3.1%) rate as a major incentive.
Just as St. Maarten was allowed to make justifiable last-minute adjustments to the so-called headline agreement on Ennia that was also a condition for the lower interest, so Aruba and its new government should at least be given a fair chance.
