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Published On: Sat, Aug 15th, 2020

Kingdom stands firm: No third tranche of liquidity support for St. Maarten

THE HAGUE – St. Maarten has so far failed to comply with the conditions attached to the third tranche of liquidity support from the Netherlands.  State Secretary Drs. Raymond Knops stated in a letter to the Dutch Parliament that financial supervisor Cft once more had been unable to establish that St. Maarten had met these conditions.

“This means that we will currently not initiate talks with St. Maarten about a third tranche of liquidity support. If St. Maarten still wants to have this conversation it will first have to prove to the Kingdom Council of Ministers via Cft that it has met all conditions for the second and the third tranche,” Knops wrote.

The state secretary added that the request (for further talks) will be assessed based on the actual circumstances, “whereby we will examine whether the need for liquidity support still exists.”

In interviews after the meeting of the Kingdom Council of Ministers on Friday, Knops made clear that the door remains firmly closed for St. Maarten’s counter-proposal. The conditions the kingdom presented on July 10 remain the point of departure for any talks about liquidity support.

Related article: MP Buncamper urges the government of the Netherlands to stop hiding behind the CFT

And while Minister Plenipotentiary René Violenus told reporters that he still saw a possibility to reach consensus before the next Kingdom Council of Ministers meeting on September 11, Knops made clear that as far as the kingdom is concerned St. Maarten’s counter-proposal is too far out of whack to be seriously considered or discussed.

St. Maarten wants changes to the proposed consensus kingdom law Caribbean Reform Entity, arguing that several elements of this draft-law are unconstitutional. But if the kingdom does not budge, St. Maarten is left with two options only: accept the conditions or run out of money.

To qualify for the third tranche liquidity support St. Maarten must comply with all conditions for the second tranche and it has to comply with the conditions for the third tranche.

The conditions for the second tranche include a cut in the salary of ministers and parliamentarians of 25 percent, a cut in the salaries of civil servants and employees of government-owned companies of 12.5 percent, and a cap on the top salaries in (semi) public sector (a maximum of 130 percent of the lowered salary of the prime minister). This must also affect payments to consultants. These salary cuts must be put in place “until further notice.” This means that compensating salary cuts in 2021 and following years cannot be part of any solution.

Qualifying for the third tranche requires accepting the establishment of the Caribbean Reform Entity.

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Related articles:
Editorial: Caribbean Reform Entity
MP Buncamper urges the government of the Netherlands to stop hiding behind the CFT




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