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Published On: Sat, Dec 12th, 2020

Now or never: Knops demands hard guarantees in exchange for liquidity support

PHILIPSBURG – The Jacobs-government is facing a tough couple of days. Monday is the last opportunity to create sufficient political support for an agreement with the Kingdom about continued liquidity support. Two days later is the deadline for the repayment of a 50 million guilders bullet loan.

State Secretary Drs. Raymond Knops has informed Prime Minister Silveria Jacobs in no uncertain terms that these deadlines are real. In an updated letter sent via email to Jacobs and to the cabinet of Governor Holiday, Knops writes that he expect a statement or motion on Monday, December 14, the latest that shows that there are no longer “incongruities” with the motion of the United People’s party and the National Alliance about decolonization that was approved in Parliament on November 5.

“I emphasize again that a motion or other declaration of support from the Parliament is a hard requirement for me to arrive at an agreement.”

Opinion piece:Will Parliament play hardball?

The November 5-motion Knops refers to urges the Dutch government and/or the kingdom “to cease and desist from any actions which conflict with its continued obligation under article 73 of the UN Charter and St. Maarten’s UN-mandated right to a full measure of self-government based on absolute equality with the Netherlands.”

The motion also instructs the Council of Ministers to organize a round table conference with the kingdom by July 2021 that “will ratify and commit to the complete decolonization of the former Netherlands Antilles.”

Knops want all these demands off the table. “I do not have to remind you,” he writes to Jacobs, “that on December 18 the extended term for the repayment of the expired bullet loan expires again. Without an agreement I do not see a possibility for further extension. The potential consequences of a technical default for St. Maarten are obviously known to you.”

Knops summarizes in his letter the results of talks with St. Maarten that began on November 13. These “technical consultations” were about the Dutch offer for a third tranche of liquidity support and the conditions attached to that offer. One of those conditions is the establishment of the Caribbean Reform Entity (CRE). The objective was to reach a political agreement during the meeting of the Kingdom Council of Ministers on December 18.

“Yesterday I learned that St. Maarten has decided to drop the Development Policy Operation (DPO). That is a meaningful step, but it does not mean that everything is now ready for a political agreement.”

Such an agreement, Knops writes to Jacobs, requires “political support in your cabinet and in parliament and you have to meet the requirements for the second tranche of liquidity support.”

On December 8, financial supervisor Cft advised the State Secretary that St. Maarten has not yet completely met the conditions for the second tranche. The Cft doubts, not without reason, that decision making about these issues in parliament will still take place this year. Furthermore, St. Maarten still has not begun to execute all measures. “This means that all these measures have to be executed retroactively as fast as possible.”

Knops’ letter reveals that the kingdom has little confidence that St. Maarten will do what it has to do. “We have asked before what St. Maarten is going to do to give the Netherlands in a timely manner the confidence that it will actually establish and execute the necessary legislation. So far we have not received an answer.”

And as long as the right answer is not forthcoming, the Netherlands will not sign any agreement on December 18.

What is it that still needs to be done? Knops sums it up neatly in his letter: 1. Retroactively lowering the total package of labor conditions for members of parliament and ministers by 25 percent; 2. Retroactively lowering the total package of labor conditions for workers in the (semi) public sector; and 3. Standardization of top salaries.

The State Secretary wants absolute guarantees that these measures are put in place: “I ask you to explain the way St. Maarten can guarantee to the Dutch cabinet that this will actually happen as soon as possible, also after an agreement has been signed.”

Knops asked Jacobs to provide this explanation no later than last Friday. It is unclear whether the prime minister has done this.

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