NETHERLANDS ROYAL DECREE FORCES CURACAO'S GOVERNMENT TO CUT BUDGET WITHIN 150 DAYS

NETHERLANDS ROYAL DECREE FORCES CURACAO'S GOVERNMENT TO CUT BUDGET WITHIN 150 DAYS

By JJosephaNews

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Willemstad, Curacao. According to the Kingdom Relations, Curacao government must close a gap of 112 million guilders in the remaining 5 months for the year 2019, this is more than 750,000 guilders a day.

This is evident from The Royal Decree that ratifies the instruction imposed on Curacao by the Kingdom Council of Ministers (the Netherlands) on 12 July 2019. The designation contains three requirements. In addition to eliminating the looming deficit of 112 million, the deficits of 2017 and 2018 must be compensated.

In total it is 169.5 million guilders. That amount must be compensated by the realization of budget surpluses for the years 2020, 2021 and 2022. The third requirement that the Netherlands places on Curacao is that, the arrears of payments to the General Pension Fund Curacao and the Social Insurance Bank has to be repaid by 31 December 2022.

In response to the Royal Decree, the Eugene Rhuggenaath Cabinet reports to appeal to the Council of State of the Kingdom. It has 30 days to do this. Appeal against the appointment is done through a formal appeal procedure with the Crown, as described in the Financial Supervision Act.

Curacao will submit a notice of appeal, after which possibly a hearing will follow. After that, it is up to the Council of State to issue advice in the form of a draft decision. That advice is issued to the Minister of the Interior and Kingdom Relations (BZK), who then has two months to decide whether he proposes to the Council of Ministers to reconsider the advice to issue a designation.

The appeal does not have suspensory effect. This means that the government in Willemstad (Curacao) must adhere immediately to the designation and must therefore take measures to close the gap in the budget in the very short term. For this, it is necessary to make substantial (extra) savings on government spending almost immediately and at the same time to increase revenues - such as taxes.

Currently, Curacao's Corporate Community have voiced their concerns towards the tax increase and Curacao workers trade unions have already warned the community of social unrest.

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