Published On: Thu, Oct 15th, 2020

Minister Irion contests Cft’s take on article 16

PHILIPSBURG – Finance Minister Ardwell Irion disagrees with financial supervisor Cft about its opinion that, by floating a 75 million guilders bond with the Central Bank, St. Maarten violates article 16 of the consensus kingdom law financial supervision (Rft). “Article 16 is vague,” Irion said during Wednesday’s Council of Minister Press briefing. “It is about loans for capital investments and we adhere to that. The bond that is floated now is to cover the costs of government operations. These are not capital expenditure loans and they do not fall under article 16. The statement of the Cft is one hundred percent inaccurate.”

A closer look at article 16 of the Rft shows that the statement made by Minister Irion leaves plenty of room for discussion. This is because article 16 speaks exclusively about loans without specifying whether they are for capital expenditures or for covering operational costs. The article therefore refers to all loans.

Even better: the article begins with the following observation: “Intentions to attract loans are included in the budgets, as described in article 15.”

In other words, de 75 million guilder loan Minister Irion is after has to be included in the national budget – be it directly or through an amendment. That budget is then subject to approval by financial supervisor Cft. But there has not been a budget amendment, let alone permission from the Cft to attract the loan.

Minister Irion admonished local media for describing the intention to float the bond as “illegal.”

“I do not believe it is illegal,” Irion said, pleading with the media “to use the correct words.”

However, the letter the Cft sent to the minister states that he is “acting in violation of article 16 of the Rft.” And since this article is part of the kingdom law financial supervision, the Cft is actually saying that Irion is breaking the law. And that is illegal.

In the same press briefing, Prime Minister Silveria Jacobs, answering a question about “the way forward” said that the Council of Ministers is constantly looking for “the other option,” without elaborating.

Jacobs remained firm in her refusal to accept the Dutch conditions for continued liquidity support. “It does not make sense to agree on the political level with something our parliament will not agree with later on.”

Jacobs and Irion both referred to the motion that rejected the establishment of a Caribbean Reform Entity the parliament unanimously approved on July 8. The motion describes the Caribbean Reform Entity as “a takeover of St. Maarten’s autonomy in disguise” and it opposes non-financial conditions for continued liquidity support.

“We have options,” Jacobs maintained. “It is up to the Dutch to decide whether they want to continue blackmailing St. Maarten, pushing us into bankruptcy and then lay upon us whatever they like. We are asking them to be humane. We are working to garner loans available on the local market. What reason could the Dutch have to say that we may not borrow on the local market when they failed to subscribe? The Dutch failed to subscribe as per law to the 2019 capital investment loan which would have seen the financial management improved since last year. We want the people of St. Maarten to know, we are not being stubborn for stubbord sake, but at some point in time we have to say enough is enough.”

The prime minister rounded off her answer by stating that parliament and her government will continue on the trajectory of finalizing the proper decolonization process per the wishes of the voters in 2000.


Related links:
UP-leader Brison spins the 75 million bond issue story
Cft objects to intended 75 million bond issue
CFT letter to MinFIN about bond issue
CFT advice on capital loan investments
Prospectus Bond Loan Government of Sint Maarten
Brison’s Interview with TV Direct’s Notisia 13