THE HAGUE--Governments of the Netherlands and Aruba reached an agreement on Tuesday on the cooperation with the Committee for Financial Supervision CFT on the supervision of the 2015 budget.

 

The Aruba government has asked the CFT for an expertise report on the draft 2015 budget and also on possible changes to the budget in an effort to address the serious financial situation of the government finances and consequent austerity measures.

 

The CFT has positively responded to this request and has asked the Kingdom Council of Ministers for approval, it was stated in a press release issued by the Dutch Ministry of Home Affairs and Kingdom Relations BZK.

"This procedure will be followed by a structural agreement that is acceptable to both governments. Aruba has submitted a multi-annual planning that aims for a deficit of 0.5 per cent in 2017, which includes a positive economic outlook after reforms in 2014 and onwards."

 

The Governments of Aruba and the Netherlands have also agreed to start deliberations soon to jointly seek the most adequate form for the cooperation with the Kingdom Council of Ministers and the CFT in the future, the short press release concluded.

 

Tuesday's agreement comes days after the meeting of the Kingdom Council of Ministers on Friday, whereby a decision on whether to install independent financial supervision for Aruba was deferred. Dutch Minister of Home Affairs and Kingdom Relations Ronald Plasterk stated after that meeting that there were no developments to report.

 

The media speculated last week that the Kingdom Council of Ministers might be taking a decision on the advice of the CFT to place Aruba under financial supervision in a construction similar to the one that is in place for Curaçao and St. Maarten.

 

Financial supervision of Curaçao and St. Maarten is secured in a Kingdom Law. That law doesn't apply for Aruba. It is possible that the budgetary supervision for Aruba will be secured in a similar law.

 

Aruba has always objected to placing the country's finances under supervision, but is left little choice as it has a staggering 2014 budget deficit of 9.3 per cent deficit and a national debt of 80.8 per cent of the Gross Domestic Product (GDP). In July this year, the Kingdom government ordered Aruba's Governor Fredis Refunjol to refrain from ratifying the 2014 budget until a sound analysis had been done by an independent authority, which the CFT did.

 

Meanwhile, Oranjestad has started the process to establish a Fiscal Council that will assist in the independent supervision of the budgetary cycle. The private sector and social partners are involved in the process to set up a Fiscal Council that should be operational by 2016.