Antillean guilder will “eventually disappear”

PHILIPSBURG – The monetary union of Curacao and St. Maarten has returned to the political agenda. This is because the supply of bank notes in Antillean guilders will dry up in about two years, Finance Minister Mike Ferrier said at Wednesday’s Council of Ministers press briefing.

Printing more guilder bank notes begs the question whether the monetary union will continue. But before that question even becomes an issue, there is another stumbling block. Ferrier: “It is not possible to continue printing these bank notes. There are technical issues with forgery and it is extremely expensive to upgrade the design of the bank notes. And are we willing to invest in a currency that eventually will have to disappear?”

Possible alternatives for the Antillean guilder are the introduction of a Caribbean guilder, dollarization or turning completely to the euro.

Minister Ferrier said that the government has not spent a whole lot of time on the issue of the monetary union. “The urgency consists herein that we are running out of currency. We must have this discussion and I hope that within the next three to six months we will have a decision about where we are going with this.”

On February 28, 2013, the Social Economic Council (SER) advised the government of St. Maarten to step out of the monetary union with Curacao in a hurry because of the huge imbalance between the two countries’ current accounts. While St. Maarten’s current account showed a moderate surplus at the time, that of Curacao showed a huge deficit. This could lead to a devaluation of the Antillean guilder, the SER warned. It also advised the government to switch to dollarization or to create its own currency – the St. Maarten dollar.