News that a solution for the Ennia issue is required to refinance the Dutch COVID-19 liquidity support loans (see related story) did not go down well with Member of Parliament (MP) George Pantophlet of the National Alliance (NA). In a letter headed “Action speaks louder than words” published in this newspaper’s Friday/Saturday edition the coalition member asked what the Netherlands has to do with this internal affair.
Constitutionally speaking, his point is probably a valid one. Financial institutions including insurance companies on the islands are supervised by the Central Bank of Curaçao and St. Maarten, which has also asked both governments for a decision before June 30.
Nevertheless, worry in The Hague is understandable and shared – as a major budget risk – by the Committee for Financial Supervision CFT. Mind you, the retirement provisions of 30,000 Dutch Caribbean residents are at stake.
As the kingdom in principle guarantees basic rights of every subject, one could argue that there is a vested interest in the issue at that level. After all, should any nation’s pension system become unreliable it may affect legal security and the investment climate.
There is ongoing litigation regarding this dispute with several procedures, of which the final outcome is not yet clear. Whether and when the entire amount of more than a billion Netherlands Antillean guilders sought from shareholders can be recovered thus remains to be seen.
According to reports from Willemstad, a capital injection of NAf. 600 million to NAf. 700 million will be needed by the end of this year to prevent benefits cuts. The latter is obviously a matter of widespread concern.
Another option is jointly contributing NAf. 50 million annually for 25 years, combined with a discount of 80% on old entitlements. Either way would cost a lot of taxpayers’ money pending a possible settlement.
After Girobank went under it had been suggested to increase the 1% foreign exchange levy (known as licence fee) of the monetary union by 0.5% to deal with the financial impact. St. Maarten rightly opposed the idea, as this was primarily a Curaçao problem.
That’s not the case for Ennia, however. This time the two countries are very much in the same boat.
