WILLEMSTAD - The government of Curaçao emphasizes in its proposals to the Financial Supervision Council (Cft) that Curaçao is in a deep recession due to the consequences of the corona crisis. Short-term actions are vital to get through the crisis. Only then will the necessary structural reforms succeed.

The package that Cft chairman Raymond Gradus received last Saturday is therefore an "ambitious but realistic" program with medium-term structural reforms in combination with short-term bridging actions. Prime Minister explained today during the government briefing what these plans are.

The focus is on eight areas and the proposed actions and reforms are largely build on projects already included in the Growth Strategy and the Growth Agreement.

In general, the government states that aid through the 'Fondo di Sostén' (support fund) will continue to be necessary for the time being to keep companies afloat and to keep jobs. These concerns, for example, wage subsidies through the Emergency Regulation on Employment Bridging (NOW), financial assistance for self-employed entrepreneurs and credit facilities for small and medium-sized enterprises. It would also be mentioned in this context that entrepreneurs can unilaterally decide to temporarily reduce their work or working hours.

The labor market is one of the main areas where structural reforms are urgently needed. The introduction of more flexible labor legislation has been the subject of discussion for years, and that the demand for and supply of employees are not compatible with each other is nothing new either. Another area of focus is, of course, government budget deficits.

In this respect, a number of things have already happened in connection with the strict conditions imposed by the Netherlands on providing emergency financial aid, such as cutting the fringe benefits of civil servants (12.5 percent) and of ministers and members of Parliament (25 percent), the introduction of the zero line and the standardization of top salaries in the (semi-) public sector.

Despite the protests from civil servants and other unions and their members, this budget cut continues anyway. Not on the existing basic salary, but on the fringe benefits. Only with regard to the variants and interpretation, there is still room for maneuver. The transitional arrangement of one year for the application of the Rhuggenaath standard for top incomes will also lapse; it should all come into effect on 1 July.

In the longer term, for example, the subsidy policy and the tax system will be overhauled. Then there is the administrative reform and structural savings in health care, for example through central purchasing of medicines and a different organization of sending patients abroad for care. But here the government expects to save a lot in the long term through prevention and information.

Education is also a focus area in the program. The government has previously announced significant cuts to the sector and is striving for greater efficiency and effectiveness in the program through the integration and reorganization of institutions.

The government had to present a package of "structural reforms" to the Cft before June 15, at the latest. The Council of Ministers met on Friday afternoon. The plan that has been presented determines the third part of the financial support from the Netherlands. Undersecretary of the Interior and Kingdom Relations Raymond Knops has asked Curaçao, just like Aruba and Sint Maarten, to come up with proposals for structural reforms. The package will be assessed and included in the decision-making on the third tranche of liquidity support in the Kingdom Council of Ministers on 3 July.