The Second Chamber of Parliament in The Hague has deferred a decision on what topics are considered too controversial for the outgoing Rutte IV Cabinet to tackle until summer recess is over (see related story). This means the three Dutch Caribbean countries may continue negotiations with the Netherlands on refinancing their COVID-19 loans expiring on October 10.
That’s good news; however, the mid-July deadline mentioned earlier is fast-approaching. And although Prime Minister Silveria Jacobs suggested a one-year postponement would probably happen if agreement could not be reached by then, there has been no confirmation from The Hague.
Obstacles remain, as the Netherlands insists on Aruba cooperating to adopt a Kingdom Law on Financial Supervision, despite Prime Minister Evelyn Wever-Croes indicating a lack of legislative support for such. Unless this deadlock is broken, Aruba will not get soft conditions and below-market interest rates the Dutch government is prepared to offer.
Curaçao and St. Maarten risk a similar fate if they don’t come up with a solution to safeguard thousands of pensions at insurance firm Ennia placed under emergency rule by the Central Bank of Curaçao and St. Maarten (CBCS) due to solvency issues, pending a US $1.1 billion legal claim against owner the Parman Group of Hushang Ansary. Between 600 and 700 million Netherlands Antillean guilders are required short-term for that while the final outcome of ongoing litigation is awaited.
As related rulings have so far been mostly favourable for CBCS, one would like to assume much of the money can still be recovered, so the capital injection sought will probably – at least partially – be temporary. One option is to have the monetary union’s financial sector provide a mandatory bridging credit and another involves CBCS dividends or funds from revaluation of its reserves.
A settlement in the court cases could theoretically also be reached, but this must occur quickly to prevent having to assist the company and its clients with an obviously undesired but necessary bailout.
