The Hague prepares Curaçao instruction

May 30, 2012 11:12 AM

THE HAGUE--Curaçao's Government can expect a formal instruction of the Kingdom Council of Ministers if Willemstad does not take measures to curb its financial shortfall.

Dutch caretaker Minister of Interior Affairs and Kingdom Relations Liesbeth Spies told the Second Chamber on Tuesday that the Kingdom Council of Ministers is "seriously preparing" to give Curaçao an instruction. An instruction implies intervention by means of a General Measure of Kingdom Government.
 
Spies issued this warning following questions by Members of the Second Chamber André Bosman of the conservative VVD party and Bas Jan van Bochove of the Christian Democratic Party CDA of which Spies is also a member. Bosman had requested to question the Minister about the NAf. 160 million deficit over 2011 during the regular so-called "Question-hour" (Vragenuurtje) in the Second Chamber on Tuesday.
 
Bosman and Van Bochove pressed on the Minister to be more proactive. Bosman pointed out that the Schotte cabinet is not sticking to the agreements under the Financial Supervision law. The agreement says that the countries Curaçao and St. Maarten may not have a budget deficit to prevent new debts. Bosman referred to Curaçao's 2011 budget as "buttery soft."
 
Van Bochove called for measures. "Isn't it getting time for the Kingdom Council of Ministers and the Dutch Government in the Kingdom Council of Ministers to take further steps than talks, talks and talks? Cynics are proven right: they get 1.5 billion euros and here we are again one year later," he said.
 
"We are indeed surpassing the phase of talking," said Spies who announced that she would be seeking clarity from Curaçao's Government on the matter during her visit to the Dutch Caribbean islands from June 10 to 15. She said "exceptionally serious, if not severe talks" had started with Willemstad.
 
The Minister said that the Dutch Government shared the concerns of the Second Chamber about the financial situation in Curaçao and St. Maarten. "We will come back on this matter in the next Kingdom Council of Ministers meetings as we have done in the past couple of meetings and consider the necessary measures," she said. The last time the Kingdom Council of Ministers considered giving an instruction was in April last year when St. Maarten had trouble balancing its budget.
 
Spies said she was very concerned about the lack of measures to curb negative consequences on the 2012 budget of Country Curaçao. "We are not seeing structural reform. We see that the gap is being closed with incidental means and the question is whether these are sufficient," she said, referring to the plans of Willemstad to use the funds of the Kingdom Tax Arrangement BRK (Belasting Regeling Koninkrijk) to cover financial shortfalls.
 
Member of Parliament (MP) Bosman pointed out that the budget procedure of Curaçao and St. Maarten are being monitored and guided by the Board for Financial Supervision CFT and that a budget with a deficit that does not comply with regulations cannot and should not be approved.
 
"The VVD says don't overtake in case of doubt. If the CFT hesitates, it cannot approve a budget. If the Minister holds on to the line, we cannot be surprised by these kinds of budget deficits of islands which received 1.5 billion in 2010 to reorganise their debt," said Bosman.
 
Bosman said he was under the impression that the CFT was being restricted. He asked the Minister to clarify. Spies said that this was not the case. She announced that the CFT would be sending a letter to the Curaçao Government this week in which it will give Government a "number of serious instructions" to adapt the 2012 budget and to comply with the norms of CFT.
 
Responding to Bosman's question whether she was "shocked" to learn of Curaçao 2011 deficit, Spies said that the Kingdom Council of Ministers had already "surpassed that stage" because The Hague for a while had been aware that a shortfall was pending.
 
Spies informed the Second Chamber on April 19 that Curaçao would close off 2011 with a considerable deficit. "We already knew that the calculations of Curaçao and the reports of Government were depicted in much more positive way than they really were."