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Netherlands prepared to subscribe to St. Maarten bond issues

POSTED: 05/3/13

Financing at around 2 percent available, also for St. Maarten

St. Maarten – The Netherlands is prepared to subscribe to bond issues for St. Maarten as long as these issues comply with the conditions set forth in the Kingdom law financial supervision. This appears from answers by Home Affairs and Kingdom Relations Minister Ronald Plasterk in to questions from VVD-MP André Bosman about the situation in Aruba.
Bosman had queried the minister about a report that the Netherlands is helping Aruba to refinance its national debt. The article appeared on March 20 in the Curacaolenean newspaper Amigoe. Bosman wanted to know why Plasterk is prepared to subscribe to a bond issue that would serve Aruba’s national debt.

“The financial protocol is the result of the umbrella cooperation protocol the Netherlands and Aruba signed in 2011 to give the cooperation a new impulse based on equal relationships and mutual trust,” Plasterk wrote. “Both Curacao and St. Maarten have the option of a current subscription if the conditions from the Kingdom law financial supervision have been met. With Aruba we have agreed that the possibilities for a current subscription will be examined. The Netherlands will have these possibilities assessed based on the standards for sustainable government finances and payback capacity that are used in the Kingdom and on the international level. If these standards are not met the Netherlands reserves the right not to subscribe.”

In March, Aruban Prime Minister Mike Eman said that participation of the Netherlands in a bond issue could bring the interest rate down from the current 4.6 percent to 2 percent. When Justice Minister Roland Duncan launched his financing proposal for the controversial Justice Park in parliament last month, the board for financial supervision Cft calculated that the loan the minister had in mind carried an interest-rate of approximately 10 percent. This was reason for the Cft – and later for the Kingdom Council of Ministers – to strongly advise against the plan.

In March, Plasterk told the Amigoe that he is confident about the way Aruba handles its finances and its economic growth-ambition. I am impressed by the decisive way Mr. Eman’s government tackles the issues in his country. It is easy to say that you want to become a gateway to America, but you will only get there by working very hard.”

MP Bosman asked Minister Plasterk whether he is familiar with a memorandum written by the Aruban opposition party MEP entitled Celebrating Going Down. Plasterk answered that he is aware of the memorandum. “It is up to the government of Aruba to react to it,” he wrote.

Other questions, about Aruba’s financial stability and about the country’s strategy to create economic growth by maintaining a budget deficit and allowing the national debt to increase met a similar fate.”Aruba is an autonomous country with its own financial and economic policy. It is the government’s responsibility to see to it that the government finances are sustainable, with the parliament as controlling body.”

Plasterk pointed to Aruba’s initiative to anchor its budget rules in the state regulation and that it will establish an advisory council tasked with supervising compliance with the rules.

To Bosman’s question why Aruba is not subject to the board for financial supervision Cft, Plasterk answered that Aruba is an autonomous country since 1986. “Since that time Aruba is financially independent without having called on debt relief as was the case with the former country Netherlands Antilles to create a healthy financial starting position for the new countries.”

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