WILLEMSTAD - The Committee for Financial Supervision (Cft) and the government of Curaçao disagree about the 'unilateral decision (of the Country) to postpone payment' in connection with the debt related to the Girobank settlement. Curaçao previously processed additional income of 25 million in the budget from 2023 due to an increase in the license fee rate.
These proceeds served to cover the obligations of the Country in the context of the Girobank settlement, for which the Country had taken out a loan of 170 million guilders from the Netherlands.
The increase in the license fee rate has not yet been implemented and the Minister of Finance has now even removed the additionally budgeted benefits from the budget again, with the 2022 draft budget amendment.
The government writes that it is in consultation with the Central Bank (CBCS) about the intention that the costs arising from the Girobank settlement will be borne by the CBCS itself.
If no agreement is reached with the CBCS on this in the short term, according to the Minister of Finance, the agreement between the Country, the CBCS and Gi-Ro Settlement Holding (GSH) would offer the Country the option to postpone payments until 2026.
And, for these reasons, the Pisas government will not comply with the recommendation of the Cft to include compensatory coverage in the budget for the Country's obligations under the Girobank settlement.
"The Cft notes that it does not appear from the agreement that the Country can unilaterally decide to postpone payment until 2026," according to the latest letter from the Board. "This requires a decision by the other parties to the agreement," the committee adds.
The Cft is very clear about this: “As long as the negotiations with the CBCS have not led to the discharge of the obligations from the balance sheet of the Country and there are also no formal agreements about deferral of payment, Curaçao must take compensatory measures for these obligations which are to be included in the multi-year budget.”
This is in connection with the removal in the amended draft budget for 2022 of the additional annual income of 25 million from next year, arising from the increase in the license fee. These additional proceeds served to cover Curaçao's obligations under the Girobank settlement.
It is unknown what the status is of the discussions between the government and the Central Bank about whether or not the CBCS should bear the obligations. In any case, it concerns a debt that the Country has in connection with a loan from the Dutch State.
