THE HAGUE - At the suggestion of Undersecretary for Kingdom Relations Raymond Knops, the Dutch government has decided to give Curacao a budgetary instruction to drastically reduce the expected financial deficit for this year of over 100 million guilders. Sources around the Dutch government report this.

The formal decision to this end will be taken tomorrow morning in an emergency meeting of the Kingdom Council of Ministers. Parallel to the imposition of the instruction, the governments of Curacao and the Netherlands sign a "growth agreement," said the same sources.

Initially, the Dutch government was going to give a budgetary instruction to Curacao a month ago, but prime minister Eugene Rhuggenaath, who had traveled to the Netherlands, managed to delay this decision for three weeks. During that period, Curacao should have presented a package of reforms and austerity measures that would make a coercive sideline unnecessary.

Last week the Kingdom Council of Ministers decided to give Curacao another week time. Over the past few days, official consultations have been held about the implementation of the austerity package. Apparently, that has given the Netherlands insufficient confidence to abandon the instruction definitively.

The budgetary instruction decided upon binds the Curacao government to a concrete objective that can only be achieved with drastic measures.