SINT MAARTEN (GREAT BAY) - The Addendum to the ENNIA Outline Agreement which Minister of Finance Marinka Gumbs presented to Parliament on September 6, will save St. Maarten a cumulative total of about 37 million guilders.
In addition, Min. Gumbs successfully secured priority for St. Maarten in the potential sale of Mullet Bay. The Minister had returned to Parliament to answer questions posed by members of the legislative body at the meeting of June 27, 2024.
Among the highlights of the Addendum are that St. Maarten will not be responsible for covering costs for the Bonaire, St. Eustatius, Saba (BES) and Suriname policyholders, which will save government some 5 million guilders.
Similarly, St. Maarten will not bear the operational expenses of the resolution fund, as contemplated in the signed Outline Agreement, thus resulting in savings of 15 million guilders.
Furthermore, St. Maarten has requested the separation of its peak facility from that of Curaçao to prevent any cost overlap. The reduction in St. Maarten’s usage of the peak facility will save approximately 3 million guilders in interest expenses, Minister Gumbs explained.
According to the Minister, “A separate administration and yearly audit report for St. Maarten will be provided by April 1, detailing St. Maarten’s portion in the resolution fund.”
All these reductions will contribute to a positive cash balance of 14 million guilders for St. Maarten for a total savings of 37 million guilders.
“Although I would have preferred an alternative solution, after a detailed review of the short-term refinancing agreement signed by the previous government, it became clear that any alternative would impose a heavy financial burden on St. Maarten,” the Minister stated.
“This is because the signed Outline Agreement stipulates that if no solution is found for Ennia, an automatic increase in interest rates will take effect in October 2024, significantly impacting both Curaçao and St. Maarten, and therefore effectively binding St. Maarten to the Ennia deal for more than 30 years,” Minister Gumbs further explained.
The Minister reiterated her firm opposition to the Netherlands linking the interest rate on national COVID loans to a solution for the private company, Ennia.
Minister Gumbs highlighted the fact that, while the Netherlands received grants from the EU to address the COVID-19 pandemic, it has charged interest on the loans provided to the islands, with the potential for even higher interest rates, resulting in profits for the Netherlands on pandemic loans.
This, she warned, would create a significant financial burden for the islands and reduce their ability to undertake necessary development, especially given the vulnerabilities of small island developing states like St. Maarten, which is in a hurricane belt and faces ongoing risk due to climate change.
Minister Gumbs stressed that the BES and Suriname policyholders are not associated with the St. Maarten Ennia office. For her, St. Maarten policyholders are defined as those whose policies are tied to the St. Maarten Ennia office.
The Minister further emphasized that the continuation of Ennia as an ongoing private business primarily benefits Curaçao, as the taxes and social premiums for the Ennia group are paid to the Curaçao government, and most of the employment is based there.
“Therefore, St. Maarten should not be expected to cover operational expenses when it does not benefit equally from all the benefits of these continued operations,” she said.
The Minister added that, “the taxes paid to Curaçao will not be shared with St. Maarten, putting the two on unequal footing. As a result, these changes will not impact Curaçao as significantly as they would St. Maarten.”
“St. Maarten is willing to pay for its own policyholders, but not for the operational costs of the Ennia group of companies,” Minister Gumbs stressed. The Minister is expected to return to Parliament soon to address further clarifications requested by members.
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