Prime Minister Silveria Jacobs confirmed (see related story) that St. Maarten was able to get an extension of at least one year on its COVID-19 loans totalling 316.4 million Netherlands Antillean guilders, so the entire amount did not become due after October 10. This, at a low interest rate of 3.4% as promised by the Dutch government in case of agreement on a durable solution for the ENNIA debacle.
The Pisas II Cabinet in Willemstad, however, at the last minute decided against a 600-million-euro loan offered by the Netherlands to rescue the company’s life insurance branch and safeguard pensions of some 30,000 persons on the two islands. For this reason, Curaçao must pay 5.1% interest the coming year on its liquidity support debt.
Once The Hague is convinced the chosen winding-down scenario provides sufficient guarantees for policyholders, the refinancing can be made long-term with a 3.4% rate for both. According to Dutch State Secretary Alexandra van Huffelen this could be done as early as January 1, 2024.
While one can understand the thinking and St. Maarten came out relatively well until now, there is something inherently wrong with this picture. It creates the impression of a schoolmaster punishing misbehaving pupils.
The latter perception is strengthened by the fact that Aruba even has to pay 6.9% because of its refusal to anchor financial supervision in a kingdom law rather than the current national ordinance. Talks are still ongoing on a so-called “hybrid” combination of the two, so these conditions could also improve in the near future.
As reported in Wednesday’s paper, Dutch Senator Peter Nicolai during a First Chamber of Parliament debate on the issue said government’s approach frustrates budgetary rights of democratically-elected local representatives. How humiliating is it to be treated like this as an autonomous country, he asked, calling it blackmail and indecent, because in a family “it is logical that big brother helps and does not punish.”
Some suggest all this has the appearance of a “divide and rule” policy often applied in colonial relationships towards the three Dutch Caribbean countries. Regardless, it just doesn’t look good, also considering how – ultimately – borrowing these funds during the pandemic was clearly a matter of survival.
