Spies warns Curaçao: We will use guarantee function

July 19, 2012 8:03 AM

THE HAGUE--The Kingdom Council of Ministers will be left no choice to deploy the guarantee function if the Curaçao Government does not execute the instruction that it got in The Hague last Friday to get its 2012 budget in order.

"In the unlikely event that the input by Curaçao of the necessary efforts and the consequent results fail to materialise, Curaçao will legally head for the only possibility to adjust within the Kingdom, namely the deployment of the guarantee function," stated Dutch caretaker Minister of Home Affairs and Kingdom Relations Liesbeth Spies in a letter that she sent to the Second Chamber on Wednesday.
 
In the letter, Spies informs the Second Chamber of the background and reasoning of the Kingdom Council of Ministers to give the Schotte cabinet a formal instruction (aanwijzing) to balance its 2012 budget deficit of NAf. 55 million, and to compensate the losses from previous years amounting to NAf. 98 million. "It is up to Curaçao as an autonomous country to take the necessary measures and to not burden the Kingdom partners with the consequences of its handling," stated Spies.
 
Spies hoped that Curaçao would be wise enough to avoid the deployment of the guarantee function as defined in the Kingdom Charter. "I assume that Curaçao will want to avoid a situation as such." At a press conference following Friday's Kingdom Council of Ministers, Spies did not want to specifically mention the guarantee function. At that time she spoke of 'possibilities in the Charter.'
 
The Minister warned that the financial supervision would continue "unabated and vigilantly." "Any diminishing of the supervision is out of the question. The Netherlands cannot accept the adverse consequences of the own choices of Curaçao," she stated.
 
Pointing out that an unchanged policy would create an immense financial burden for the Curaçao people, Spies stated that it was important to make sure that Willemstad complied with the responsibilities under the Law on Financial Supervision for Curaçao and St. Maarten.
 
The Minister made clear that, in line with the wish of the Second Chamber, the Dutch Government will reject any possible request by Curaçao for additional financial assistance.
 
She said that Curaçao did "absolutely insufficient" to deal with its financial challenges of producing a balanced budget. According to her, Willemstad insufficiently recognised and acknowledged its financial problem. "It has repeatedly become clear that the direction and commitment of the Curaçao Government was insufficient to take the necessary steps to deal with the budgetary problem."
 
Spies stated that Curaçao seemed determined to stick to a financial policy that will lead to "an accumulation of structural problems" for Curaçao. "Suffice to say that this is not good for the relations in the Kingdom. But more importantly, the people of Curaçao will ultimately pay the price for this because the facilities will come under pressure because of bad financial management."
 
The Minister hoped that the Curaçao Government would assume its responsibility with the instruction and that it would adequately execute the required measures. She also hoped that Willemstad would find its own strength to realise sound financial practice whereby the financial balance "for now and for later" would be guaranteed.
 
The instruction of the Kingdom Council of Ministers went into effect in the form of a Royal Decree dated July 18. The decree was sent to Curaçao Prime Minister Gerrit Schotte the same day, Wednesday. Copies also went to the Curaçao Parliament, Curaçao Finance Minister George Jamaloodin and Curaçao Governor Frits Goedgedrag.