Published On: Tue, Aug 25th, 2020

Government still struggles with conditions for liquidity support

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PHILIPSBURG – St. Maarten has a fundamental difference of opinion with financial supervisor Cft about the conditions attached to the second tranche of liquidity support, Finance Minister Ardwell Irion said during last week’s online Council of Ministers press briefing. “Our opinion is that we have met the conditions for the second tranche, while the Cft could not determine this,” the minister said.

Irion said that his cabinet is currently working on a response to the concerns “to make sure we have a seat at the table. Starting the discussions about the third tranche are important.”

The minister said that these efforts require the cooperation of “all ministers, all government departments, civil servants, unions, relevant high councils and the parliament.”

While St. Maarten complied with several of the conditions for the second tranche, the final decisions were not in place at the time when the Cft wrote its advice. There remains however a, indeed, fundamental dispute about the way St. Maarten intends to cut the labor conditions package of its civil servants by 12.5 percent. The Cft maintains that St. Maarten had not met this condition. The so-called Jacobs-norm (maximizing the salaries for top-earners in the (semi)public sector to 130 percent of her lowered salary) is also still pending.

Before State Secretary Drs. Raymond Knops is prepared to start talking with St. Maarten about the third tranche of liquidity support, the government must prove, via the Cft, that it has met all conditions, not only for the second tranche, but also for the third tranche. This includes for instance the establishment of the controversial Caribbean Reform Entity.

The Cft, and State Secretary Knops, have concluded that St. Maarten has so far failed to comply with the demand to cut the salaries of ministers and parliamentarians by 25 percent. The 10 percent cut MPs agreed to back in April cannot be part of this requirement and the changes still have to be embedded in a budget amendment.

St. Maarten has until September 1 to present a parliament-approved plan for maximizing the top-salaries in the (semi) public sector. Minister Plenipotentiary René Violenus wrote on May 20 to Knops that St. Maarten had accepted the conditions for liquidity support unconditionally. But based on recent developments, the government is still looking for some (non-existent) wriggling space.

And let’s not forget that there are still other conditions the government has to meet. Before September 15 it has to present a plan for strengthening the governance of the Central Bank of Curacao and St. Maarten. By the same date it has to make clear that requests for work and residence permits for independents that come to the island to work for the National Recovery Program Bureau will be handled within three weeks,. Together with the Netherlands, St. Maarten furthermore has to commission research into a long-term solution for the detention situation to UNOPS, the United Nations Office for Project Services.