SINT MAARTEN (POND ISLAND) – “I will start this press briefing with reading from the report of State Secretary Knops to the Second Chamber in The Netherlands as it relates to the liquidity loans from the Netherlands to St. Maarten,” Minister of Finance Ardwell Irion said on Wednesday during the Council of Ministers (COM) press briefing.
“The Cft was again unable to establish that Sint Maarten has met the conditions for the second tranche of liquidity support. This means that no talks will commence with Sint Maarten about the provision of a third tranche of liquidity support. If Sint Maarten still wants to have this conversation, the country will first have to demonstrate to the Council of Ministers via the Cft that all the conditions set for the second and third tranches have been met. The Kingdom Council of Ministers will then assess the request, based on the circumstances at that moment, whereby it will, in any case be examined, whether there is still a need for liquidity support.
“Ladies and Gentlemen of the media, people of St. Maarten,
“Let’s review St. Maarten received Naf 24 million – first part of the 2nd tranche after accepting the conditions set by the Kingdom Council of Ministers.
“In a letter of June 30th CFT, wrote that it had recommended that St. Maarten receive Naf 53 million for the period May 15th through June 30th. Naf 29 million would be made available after the following conditions were met:
“The letter further provided more detailed explanation as to the application of the conditions.
“In a letter addressed to State Secretary Knops on July 21st, 2020 and copied to me among others, the CFT informed the State Secretary that St. Maarten had satisfactorily met the conditions of the payroll support adjustments. Considering the adjusted conditions of the payroll support would go into effect as of June1st and not May 15th as stated in the conditions, the amount would be reduced to 2/3 of the Naf 29 million, which is Naf 19.3 million.
“That brings us to the KCOM meeting of August 14th, 2020.
The Cft cannot establish that SXM has met all the conditions for the second tranche of liquidity support. This means that no talks can be held with Sint Maarten about a third tranche of liquidity support states State Secretary Knops to the Kingdom Council of Ministers.
If Sint Maarten still wants to have this conversation, the country will first have to demonstrate to the Council of Ministers through the Cft that all the conditions have been met. This request will then be assessed by the Kingdom Council of Ministers on the basis of the circumstances at that time, whereby it will in any case be examined whether the need for liquidity support still exists.
“I would like to reiterate what was stated by the Minister Plenipotentiary during last Friday’s KCOM meeting, which is that at the time of the decision regarding the second tranche conditions, a substantial part of the applications for May had already been processed. The implementation of the adjustment as of June 1st was reasonable given the date of decision-making.
“So the adjustment of the conditions of the payroll support program was not successful on May 15th 2020, and because of that the Naf 29 million was cut by 9.7 million guilders.
“During the meeting of August 14th St. Maarten requested to accrue the deducted funds which were cut because of the 2-week delay in implementation of the adjustments to the payroll support.
Conditions for the second installment second tranche
“Sint Maarten has a fundamental difference of opinion with the Cft about the validity of the legal reforms approved by Parliament, recently adopted by the Governor and published in the National Gazette.
“This concerns reforms for which significant legislative changes were necessary. It is noteworthy that Sint Maarten has nevertheless succeeded in having such reforms approved and declared applicable.
“These reforms are:
“These reforms will lead to savings for the 2020 budget and to a cost savings of the salaries and benefits package for government officials. In other words, the enforcement of these reforms will affect the working conditions of the public servants and will lead to savings in the 2020 budget.
“Not counting these reforms could further complicate the successful conclusion of the negotiations with the Unions and the acceptance of the 12.5% reduction in the employment conditions package.
“St. Maarten presented a document in which it described the application of this condition:
Cft has indicated that these two items are not to be considered part of the reduction of the 12.5% as they stem from previous KCOM instructions in 2015 and 2016.
“The legislative trajectories have started but not yet completed and there are still negotiations with the Civil Servants unions have not yet been concluded, as such there are no formal decisions.
“The CFT therefore concluded that St. Maarten had not complied with the 12. 5% reduction.
“The calculation, which was submitted, included the reduction of the pension premium and as such the condition is considered not completed.
“Sint Maarten is of the opinion that these implemented reforms should from part of the reductions, particularly the 12.5% reduction in terms of employment package, and the Cft does not think so and therefore assumes a total discount of 20.5%. The Cft does not judge with due regard to the local context. In that case, discussions with Cft are complicated.
“This difference of opinion leads, among other things, to the fact that Sint Maarten is of the opinion that it meets the conditions set for the second tranche, while the Cft cannot determine this.
“Starting the discussions about the third tranche of liquidity support is important, sooner rather than later.
“We will continue communicating with Cft, in fact, my cabinet has a meeting today at 3:00 pm.
“We are currently working on responding to all the concerns expressed and will make all effort possible to ensure that we have a seat at the table. It does require however, cooperation from all ministers, all government departments, civil servants, unions, relevant high councils and once the legislative amendments reach parliament also parliament.”