Published On: Sat, Oct 7th, 2023

Curacao refuses loan and Ennia Leven will cease to exist

PHILIPSBURG — The Dutch loan of €600 million (1.2 billion guilders or $636 million) to Curacao and St. Maarten to save the life insurance branch of insurance company ENNIA is off the table. Curacao’s Prime Minister Gilmar Pisas stated that his government in cooperation with the government of St. Maarten will make a serious effort to guarantee the interest of 30,000 policy holder and the employees of Ennia Caribe Leven “as much as possible” without neglecting the interest of the people of Curacao.

In consultation with the Central Bank of Curacao and St. Maarten (CBCS) the government of Curacao has decided to make the necessary resources available for the next 25 years to enable the payment of pensions in case the insurance company does not have enough money to do so.

According to Pisas the CBCS will also contribute to this solution.

Dossierkoninkrijksrelaties.nl reports that Pisas intends to contribute annually 30 million guilders to safeguard the pensions. Ennia Leven will not accept any new participants to its pension fund and therefore the company will cease to exist in about thirty years.

The Kingdom linked refinancing of liquidity loans to a solution for Ennia, but it soon became clear that accepting two large loans for a total of around 2 billion guilders ($1.1 billion) is not sustainable for Curacao. These loans would corner Curacao and make it difficult, if not impossible, to execute its tasks and to invest in economic growth.

“That is not the purpose because the country must remain financially governable,” Pisas said in an elucidation on his government’s decision to decline the Dutch loan-offer.

The prime minister referred to three advices of financial supervisor Cft against the loan. It would limit Curacao’s loan capacity and result in serious financial-economic and social consequences.

The Antilliaans Dagblad reported that Curacao will not contribute any money during the first three to four years because during that time Ennia’s assets will be used to cover pension payments.

The CBCS makes dividend payments available to cover future deficits. These dividends would normally end up with the governments of Curacao and St. Maarten but they will now be used, at least partially, to cover pension payments.

The newspaper quotes Minister of Finance Silvania as saying that the government does not plan to increase taxes to cover the costs of the solution. “I believe that, with better compliance, there is much more money we can collect from the rich. That is already happening and it will be intensified. Instead of borrowing again from the Netherlands this government wants to take care of its own business.”

It is unclear what the consequences are for the government of St. Maarten. Of the 30,000 pensioners that are insured at Ennia, 25,000 live in Curacao, the others in St. Maarten.

Minister of Finance Ardwell Irion said at Wednesday’s press briefing that St. Maarten’s exposure to the €600 million loan would have been ten percent – therefore, €60 million or $63.6 million).

In the Dutch parliament, Roelien Kamminga (VVD) demands an explanation from State Secretary Alexandra van Huffelen (Kingdom Relations) about Curacao’s refusal of the loan. Kamminga wants to know whether the state secretary considers Curacao’s solution as sufficient, because this will influence the interest the country will have to pay on its refinanced liquidity loans.

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